May 29, 2024

2010 Gold, Silver, Platinum, and Palladium Price Performance

Precious metals delivered another year of strong performance, with double digit percentage gains for gold, silver, platinum, and palladium.

Palladium led the pack with an increase of 96.77% for the year. The metal is now at a nine year high, with gains attributed to the dwindling stockpiles in Russia amidst increased demand for use within catalytic converters in gasoline powered automobiles. As recently as December 2008, the price of palladium was $164 per ounce, compared to this year’s closing price of $791.

Silver had an impressive year with a gain of more than 80%, outperforming gold’s rise of 27.74%. With the price of silver moving up faster than gold, the gold-silver ratio continues to contract. This ratio indicates the number of ounces of silver necessary to purchase one ounce of gold. At the start of the year, the ratio was 64.98. At the close of the year, the ratio is 46.04.

The table below shows the last available London Fix prices from 2009, today’s London AM Fix price, the change, and percentage change.

2010 Precious Metals Price Performance

Dec 31, 2009 Dec 31, 2010 Change Percent
Gold $1,104.00 $1,410.25 $306.25 27.74%
Silver 16.99 30.63 13.64 80.28%
Platinum 1,466.00 1,731.00 265.00 18.08%
Palladium 402.00 791.00 389.00 96.77%

Although palladium and silver outshone gold this year, gold continues its impressive streak of consecutive annual gains. The price of gold has recorded an annual gain each year since 2001. During the ten year period, the price of gold has risen more than fourfold from $272 per ounce to $1,410.

Palladium Price at Nine Year High

While gold and silver have dominated the media spotlight this year, the price of palladium has outperformed both. For the year to date, palladium is up $337 per ounce or more than 85%.

By comparison, gold has risen $333.50 per ounce or 30.67% from the start of the year. Meanwhile, silver has risen by $11.56 per ounce for the year to date, or around 68%. Much of silver’s rise has come over the course of the past three months.

November 19, 2010 London PM Fix Prices
Gold $ 1,421.00
Silver $ 28.55
Platinum $ 1,786.00
Palladium $ 730.00

Palladium’s strong performance began following the sharp decline across all precious metals prices that took place at the end of 2008. Measured from palladium’s low of $164 reached in December 2008, the price is up an astonishing 345%.

From gold’s low price of $712.50 reached in October 2008, the price increase measures about 100%. For silver, from the low price of $8.88 reached in October 2008, the has returned 221.5%. Once again, palladium outshines the performance of both.

The current price of palladium represents a nine year high for the metal. The continued rise has been attributed to dwindling stockpiles in Russia amidst increased use within China for catalytic converters in gasoline powered automobiles.

Earlier this year the first palladium ETF for U.S. investors was launched by ETFS Securities, trading until the symbol PLL. More recently, a bill was introduced in the U.S. House of Representatives seeking to authorize American Palladium Eagle bullion coins.

Gold and Silver Recap: Making Up Lost Ground

Another Precious Week in the Market

So the world’s returning to normal, and that’s a mild and slowly accelerating form of panic.  And all the precious metals are going up, at least against the dollar.

But there’s some bad news.  A load of tea partying gold bugs are heading to congress, and according to HSBC that’s bad for the price of gold.  Not really much evidence from their actual policies, but there’s a “loose correlation” between the gold price and democratic control of congress.

Precious Metals London Fix Prices
Gold $1,346.75 +24.25 (+1.83%)
Silver $23.96 +0.91 (+3.95%)
Platinum $1,700.00 +27.00 (+1.61%)
Palladium $640.00 +54.00 (+9.22%)

There’s also the Indian festival season which accounts for a stunning quarter of annual gold sales in India (a massive gold market).  This is good news, but Diwali is when it ends – and this year that’s Friday the 5th.  As the gold that is purchased is physical gold, then this is done for the year.  That’s a bit of a tighter correlation.

But there’s another piece of “news”, the London based Financial Times – a business paper that is essentially of the left (and the British left at that – so quite far left in American terms) has said that gold is a buy because the Chinese want it.  Well, actually when you look at it it’s an opinion piece written by David Hale of David Hale Global Economics, and although he sounds certain about the Chinese wish to project financial power and the Chinese consumer’s wish to protect him or herself from inflation, it’s based on conjecture.  They are useful signposts – and we should watch for them, but it’s not a sure fire prediction.

Palladium is the metal to watch at the moment (which probably will mean to watch … going down).  It was the only metal that held up last week, and it’s gone up considerably this week.  Palladium is driven by the demand for automobiles as well as having a Russian supply issue.  That is the Russians aren’t that keen on supplying it.

From undoubted manipulation, to probably imagined manipulation, the silver prices is not the star of the show this week.  There is some fevered speculation that there is another Bunker Hunt style cornering of the silver market.   Yes, it can happen, but look at what happened to those who tried it.

Platinum has been the most subdued of the precious metals this week, although there seems to be some radical restructuring of that particular industry with the world’s largest producer, South Africa’s Anglo Platinum going into “negotiations”, although it’s not clear what that is.  As they’ve recently been increasing output then it’s hardly likely to be closing the joint.

Gold and Silver Recap: Falling Prices

Another Precious Week in the Market

So who’s buying on the dips then?  Gold, silver and platinum prices are all down – mainly from Friday.

But have thy really gone down?  After all, the reason that we’re being given is that the dollar’s not weakening any more.  So what’s really happening, gold going down or the dollar going up?  Temporarily up.

Precious Metals London Fix Prices
Gold $1,322.50 -45.00 (-3.29%)
Silver $23.05 -1.37 (-5.61%)
Platinum $1,673.00 -18.00 (-1.06%)
Palladium $586.00 -5.00 (-0.85%)

Gold is essentially a short on all the currencies in the world, so it does pay us to look at what those currencies are doing.  For a while it seemed that they were only agreed on one thing, they were going to get to the bottom first.  Even the British Conservative government, that relishes its tough spending talk, has said that it is monetarily expansive.

So gold can’t help but go up.  Let’s not treat it as some speculative metal that people hold when the entire world is going crazy (although it helps when the world is going crazy) but look at it as a currency among others, but one that can not be printed.

So gold is bound to get in a bit of trouble when the industrial countries decide to get serious about printing out money.  If competitive devaluation is really over then so is gold, for the next few years.  But who are we kidding?  Competitive devaluation will be there until inflation starts hitting.  Then it will be too late.  And the central banks will be buying gold as well.

Speaking of which, South Korea is starting to buy gold.  It’s all a bit odd, these Asian countries with massive foreign currency reserves (and South Korea is only the fifth largest) speaking about buying gold.  If China loses faith with the dollar, then it could get hairy.  The dollars prospects, that is, not China.

Silver has been the purer precious metal play and so almost doubled gold’s fall.  This is despite China suggesting that it will cut back on its exports by as much as 40%.  Jim Rogers, the man who first opened the eyes of many investors to commodities, has also come out as a big bull on silver.

So the dark horse is palladium, which declined the least of the metals this week.

Palladium is like platinum in that most of the production is in either the Russian Federation or South Africa. But unlike platinum, Russia has been in a price fixing operation, by buying stocks of the metal in lean times and has been offloading it.  Well these stocks are drying up.  Just like central bank stockpiles of gold started to about five years ago.  And we all know what happened then.