Fool's Gold Report: Platinum-Group Metals Keep Climbing Faster Than Gold

Gold and silver stayed close to unchanged today, but platinum and palladium posted solid gains once again. Find out why here.

Mar 5, 2014 at 7:16PM

After two days of turmoil, the stock market took today to take a rest from its turbulent movements, and for the most part, the precious metals markets followed suit. April gold futures gained $2.40 per ounce to settle at $1,340.30, while May silver futures picked up a nickel to settle at $21.27 per ounce. Yet even though the SPDR Gold Shares (NYSEMKT:GLD) rose just a sixth of a percent and the iShares Silver Trust (NYSEMKT:SLV) dropped a single penny, the other part of the precious-metals complex posted sharp gains, as platinum and palladium both soared more than 1%.


Today's Spot Price and Change From Previous Day


$1,337, up $2


$21.16, up $0.02


$1,473, up $17


$769, up $10

Source: Kitco. As of 5:30 p.m. EST.

Gold And Silver

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

Why are metals diverging?
The disparate performance of gold, silver, platinum, and palladium shows the different dynamics that affect each of the precious metals. For gold, a lack of bad news from Ukraine led to downward pressure on prices, but concerns about the U.S. economy helped support the yellow metal today. In particular, following soft numbers from the ADP private employment report and Federal Reserve's Beige Book assessment of regional economic conditions across the nation, investors were willing to hold onto gold pending more information from the February nonfarm payroll and unemployment report, which will be released on Friday.

But platinum and palladium are dealing with much different conditions, as palladium rose to its highest levels in nearly a year. Several factors are pushing platinum-group metals higher, including ongoing labor trouble in South Africa, where a substantial portion of the world's production of platinum and palladium comes from. In addition, Russia is the largest producer of palladium in the world, and with the threat of economic sanctions if the Russian government doesn't back down from its aggressive stance on the Ukrainian situation, precious-metals investors are weighing the potential for even greater supply disruptions.

Miners climb
Meanwhile, mining stocks fared better than bullion today, with the Market Vectors Gold Miners ETF (NYSEMKT:GDX) up 1.5%. Last night, Barrick Gold (NYSE:ABX) CEO Jamie Sokalsky said that his company isn't looking to reimplement hedges, but it is willing to sell some of its assets in order to streamline its operations. Moreover, Sokalsky expects the potential for $2,000 gold within the next three years. Although the positive words didn't help Barrick stock, other miners saw impressive gains.

Platinum-group metal miner Stillwater Mining (NYSE:SWC) had a strong day, rising 4% on the price gains for platinum and palladium and hitting its highest levels in a year. As long as political tension continues in Russia and labor problems plague South Africa's mining community, Stillwater could be the most reliable source of platinum-group metals in the world market.

Gold investors should continue staying aware of conditions in the Crimea, but economic data will also play a vital role going forward. In the long run, the fact that gold has managed to find what appears to be a floor price could be very valuable for prospects for a new bull market going forward.

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