Strategists at Capital Economics continue to expect the vaccine rollout to enable economies to re-open later this year, which should bolster riskier assets and weigh further on the price of gold. What’s more, the palladium price surged in March, and it will continue to outperform the price of platinum over the next few years.
March was a mixed month for precious metals prices
“The largest move was in the price of palladium, which surged by 14% after Nornickel revised down its 2021 PGM production guidance by 15-20%. We think that the price of palladium will outperform the price of platinum over the next few years.”
“The price of gold held steady, reflecting movements in US real yields. Gold has tracked long-dated real Treasury yields in recent months, while the relationship with short-dated real yields has broken down. We think that long-dated real yields will rise a bit further, putting the gold price under more pressure.”
“The price of silver fell by around 6%. As a result, the gold/silver ratio edged up above its long-term average. We expect the price of silver to continue to decline over the rest of the year as industrial metals prices drop back, helping to push up the gold/silver price ratio further.”
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