Metals update for March 26

Spot bullion dealings opened the final session of this week with a $6.20 per ounce rise, quoted at $1097.20 and looking as if they might successfully trim the weekly loss towards which they were headed.

Silver started off with a 26¢ gain, quoted at $16.84 the ounce, while platinum added only $1 to open at one dollar under the round $1600.00 mark.

Palladium climbed $7 to start at $458.00 the ounce, while once again no change was reported in rhodium – last seen at $2280.00 bid per troy ounce. For gold, the support -now seen at $1075.00- is a ‘must-hold’ while the tenor of the market might not improve until and unless the $1120 value zone is overcome.

For the time being, the gold market was seen maintaining near $1100.00 as fourth-quarter U.S. GDP data (revised down to 5.6% from 5.9%) offered a bit of support to it and to oil. Let’s see what Friday’s closing levels turn out to be. Bullion had finished last Friday near $1108.00.

Indian buyers crossed their arms overnight, signaling that the short-covering rally we have witnessed over the past two sessions has dampened local appetite for the shiny stuff. For the month of February, Indian-sourced statistics reveal a larger than 15% drop in gold imports. About 29 tonnes of bullion made their way into the country following January’s decent 34-tonne import levels. Rising prices in the international (and local) markets were once again blamed.

Well, the CFTC hearings went pretty much according to the preview and outline we gave you 24 hours ago. Contrasting position statements were tendered, probing questions were aimed at the panelists, and no hard conclusions were reached. The majority of panelists appeared to staunchly oppose the imposition of limits on metals positions, while really no one disagreed that close regulation and more transparency are in everyone’s best interest. Still, a couple of statements made by certain participants raise a few eyebrows, to be sure.

Kitco News reports that Mr. Richard Strait of Triland USA expressed concern about ETFs in strategic metals such as platinum and palladium. "There seems to be a need for better oversight of the approval process of ETFs, citing the new ETFs in platinum and palladium," he said. "These are thin markets with limited supply," he said, emphasizing they are strategic metal commodities with growing high tech applications in civilian, aerospace and military areas. In response to a question from a CFTC commissioner, Strait said it was "insane" to take a complex group of metals such as platinum and palladium and put them into an ETF. He said it artificially drives the price up "and puts these very important metals in the hands of people who can trade in an E*Trade account."

Jon Nadler, Senior Analyst for Kitco Metals Inc.

North America US & Canada

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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