Gold bottoming at the December 2017 low

Unlike after previous FED rate hikes, precious metals don't quickly bounce up but continue their losing strike. A stronger USD is only part of the story.

Platinum, Palladium and Silver relative to Gold.

The rejuvenated gold recovery quickly wipes all past hardship from our collective memories. Yet the yellow metal only bottomed on Dec 3, 2015. The 'white precious metals' continued weakening unabated thereafter until somewhen in January 2016.

Relentless slide ...

The S&P broad market index holds above 2000, within a sigh of its all time high. Bond markets suffer somewhat as rates have risen above the August lows. In the mean time, precious metals continue to slide, irrespective of whether the economic indicators coming through are good or bad, whether the stock market goes up or down or geopolitical tensions ease or aggravate.

Depressive June ending with a manic gold miner recovery rally

Precious metal investors have been watching in disbelief how gold tumbled through all resistance levels eventually bottoming well below $1200 in European trading and during the NYMEX morning session, yesterday June 28. The recovery rally however was written in the stars:

• On Thursday, precious metal miners followed the stock market recovery, ignoring the continuing plunge of the yellow metal;
• While gold continued the last stage in its race to the bottom, silver upheld well on Thursday and both platinum and palladium reverted course and started recovering; the proverbial "bridge too far" for gold bears...

Platinum group metals, a story of scarcity and industrial needs

Among precious metals, platinum deserves special attention because of several of its characteristics. Unlike gold or silver, platinum is an extremely hard metal, with high wear resistance. Alloying platinum with gold makes the alloy more malleable.  Platinum is denser than gold and has with 21.45 g/cm³ over twice the density of silver. It melts at a higher temperature (1768.3 °C or 2041.4 K) than silver or gold.  Unlike silver and palladium[1] and similar to gold, platinum is not corroded in any normal environment.
(With graphs updated as of Jan 5, 2017)

Sudden swoons are the fate of precious metal prices

The future casino

The futures volume traded exceeds the trade of physical products manifold. This often is the case for soft commodities, crude and non-ferro metals. Yet precious metals really trump all. Many on-line trading platforms don’t even allow any physical settlement, reducing a future contract to a bet on the future price. Describing a gold future transaction as "a promise to sell by a party who hasn't got the precious metal to a buyer who hasn't got the cash" is hardly exaggerating.

QE expectations kick-start precious metals rally

Weak employment data spur the expectation on the FED initiating QE3 rather soon, which in turn prevented the stock market from collapsing on the bad news. The S&P ultimately closes with a 0.4% gain.

The expectation of further liquidity injection really kick-started precious metals. Gold had eased to below $1700 but leaped over 2% within minutes. By 4:45 pm gold is up 2.06% to $1736.3. A similar story for silver quoting at $33.67 up nearly 3%. PGM's lag, with Pt adding 0.5% and Pd up 1.25%.

The slump in precious metal miners

Havoc during the financial crisis 

Before the 2008 financial crisis and as late as March 08, when gold peaked above $1000 for the first time ever, the popular HUI index of unhedged gold miners quoted above 500. The ratio HUI/Gold had been in a trading range between 0.4 and 0.6 for several years. This seemed to be a dynamic equilibrium. Forced liquidations during the financial crisis caused a near 30% retreat for gold, bringing the price down to around $725 (not counting intraday lows). This meant carnage for the gold miners, which fell off a cliff, with the HUI plunging from 515 (March 14) to 152 (Oct 27). The HUI/Gold ratio plunged from 0.51 to 0.21 between those two dates.

Goudmijnen: een turbo op de goudprijs?

Als de goudprijs hoge toppen scheert, zoals begin december, trekken ook de koersen van goudmijnen doorgaans zeer sterk aan. Een manier om dit te kwantificeren, zonder rekening te moeten houden met bedrijfsspecifieke gegevens die soms de trend doorkruisen, is de $HUI/$GOLD verhouding bekijken.

Silver-Gold ratio seen from a different perspective

You read a 2009 article. The present situation bears little resemblance with those circumstances prevailing several years ago. Tendencies observed have broken down.
The US-dollar strength being negatively correlated to commodity and precious metal prices, its influence on both silver and gold prices is similar, therefore the silver-gold ratio is largely dollar independent.