The Phaserl


Metals, She Wrote: 2016 in Review

from Provident Metals:

Ladies and gentlemen, it’s December.

2016 has flown by, and the early nights and bright twinkling lights indicate the holidays are here. With the arrival of each new year comes the inevitable reflection of the previous.

I’m reminiscing over the events that have shaped the year for the commodities market, and a few things stand out.

First, 2016 was a year of extreme controversy. As an election year, every outlet of social media, as well as mainstream journalists, produced a nonstop barrage of hate-filled propaganda, inflicting angst upon the general public. Brexit happened. Religious warfare continued domestically and overseas.

Wherever you turn, you can find ample examples of a restless world, cloaked in frustration and discord. The volatility of the geopolitical world has created an equally volatile precious metals market. Prices have soared at times, in response to events like Brexit. Currently, prices are sinking, with indications the Fed will raise interest rates at its December meeting.

Second, the US economy and its dollar have had a significant impact on the precious metals market, namely gold. As positive job market reports are published, gold prices decrease, as the US dollar increases. Positive manufacturing sentiment and belief in the return of outsourced jobs to the US create a more robust economy, which leads people less to safe haven investments.

Third, supply and demand will always dictate market prices. As mines close or new mines open, environmental events occur, political judgments affect supply, or industry increases or decreases its usage of a commodity, price fluctuation is inevitable. Most notably for the precious metals, platinum and palladium have been affected in 2016 due to their strong connection to the automotive industry. As need for these metals has grown, price increased; as research into electric cars went on the incline, prices decreased a bit.

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