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Evening Gold Report: Platinum Leads Gold, Silver Higher; Freeport, Stillwater Climb

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

With the stock market soaring to new heights again today, many investors might think that gold, and other precious metals, would inevitably drop in response. Yet, even though bond-market interest rates climbed Thursday to levels not seen in two years, metals prices generally gained, with platinum leading the way with a rise of $23 per ounce. Gold climbed $6, to $1,211, but trading activity was muted, with SPDR Gold (NYSEMKT: GLD  ) sporting less than half its normal daily volume Thursday. Freeport-McMoRan Copper & Gold (NYSE: FCX  ) posted solid gains, while Hecla Mining (NYSE: HL  ) and Coeur Mining (NYSE: CDE  ) led silver stocks higher. Stillwater Mining (NYSE: SWC  ) also rose.

Image Sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

Freeport-McMoRan rose almost 2% today as the company benefited from its multiple areas of exposure to commodities. Copper prices rose about $0.02, to $3.31 per pound, continuing an upward move from about $3.15 at the beginning of December. As the economy starts to pick up steam, copper has responded favorably to the potential for greater industrial and construction-related demand. Meanwhile, modest gains in gold prices, plus the company's new energy exposure from its acquisitions earlier this year, have given Freeport a much more diversified business across many major commodities.

Hecla and Coeur gained about 3% and 2%, respectively, on a good day for silver, which rose $0.31, to $19.80 per ounce today. Both stocks are closely linked to the changing price of silver, but Hecla arguably has the better long-term prospects as its Lucky Friday mine continues to rebound from its year-long closure in 2012. Meanwhile, Coeur faces the challenges of relatively high production costs for its silver, and even cost-cutting measures might prove insufficient to rescue the mining company from the consequences of falling profit margins and potential cash shortages in the future.

Finally, Stillwater Mining climbed 1%, with the sole public U.S. producer of platinum and palladium benefiting from gains in prices of platinum-group metals. In particular, palladium has performed much better than gold and silver this year, with prices remaining close to unchanged for 2013. Palladium's use in the automotive industry has helped bolster demand for the metal, and put it in a much more favorable situation than its fellow precious metals. As long as car sales continue to climb, palladium and platinum could easily outperform the yellow metal, giving Stillwater a key advantage over miners without exposure to the platinum-group metals.

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8/31/2016 4:00 PM
CDE $12.74 Down -0.02 -0.16%
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FCX $10.29 Down -0.27 -2.56%
Freeport-McMoRan C… CAPS Rating: ****
GLD $124.78 Down -0.25 -0.20%
SPDR Gold Trust CAPS Rating: **
HL $5.58 Up +0.03 +0.54%
Hecla Mining CAPS Rating: **
SWC $12.65 Up +0.09 +0.72%
Stillwater Mining CAPS Rating: ***