In a November 1 Barchart article, I wrote:
While gold briefly probed above the psychological $2,000 level, the price pulled back. However, October’s price action set the stage for another technical signal at the end of the month.
Gold had put in a bullish key reversal pattern on the monthly chart in October. Gold was trading at $1,997.90 on November 1 and was higher over at the $2,050 level on December 1. The price consolidation could mean that gold is preparing for a new high later this month or early 2024.
The Aberdeen Physical Precious Metals Basket (GLTR) owns the four precious metals that trade on the CME’s COMEX and NYMEX divisions. Over 60% of the ETF’s assets are invested in gold.
Gold moved higher
After reaching a $1,823.50 low on October 6 on the nearby December COMEX gold futures contract, the outbreak of war in Israel caused the price to gap higher on Monday, October 9.
The chart highlights gold’s ascent to a $2,019.70 high on October 27. After a correction to $1,935.60 on November 13, December gold closed November at near $2,040 per ounce. Gold made a higher high after consolidating around the $2,000 level.
Silver has moved higher
Silver, the precious metal that tends to move higher and lower with gold, followed a similar path since its early October 2023 low.
The daily COMEX December silver futures chart shows the decline to the $20.85 per ounce low on October 4 and the rally that has taken silver futures to the latest $25.410 high on December 1.
The weekly silver futures chart highlights the bullish key reversal in mid-November, where silver traded below the prior week’s low and closed above its high. The reversal could lead to further gains in the silver futures arena.
Platinum group metals have recovered
The price action in platinum and palladium had been weak, but the precious and industrial metals found bottoms over the past weeks and turned higher.
The ten-year NYMEX platinum futures chart shows the November decline to a new 2023 low at $838.60 per ounce. Platinum was nearly $100 higher in early December.
The monthly NYMEX palladium chart illustrates the steady decline from the March 2022 record high of $3,380.50 per ounce. Palladium traded at less than one-third of that price at the recent November 2023 $974.90 low. Palladium recovered to just over $1,000 per ounce but remains in a significant downtrend in early December 2023.
Precious metals offer safety and value
Markets reflect the economic and geopolitical landscapes, which remain highly uncertain in late 2023. Many market participants are increasingly turning to alternative investment assets as stocks and bonds have been on shaky ground.
Precious metals offer long-term safety as they are stores of value. Moreover, while each metal has individual supply and demand fundamentals, investment demand is critical for the path of least resistance of gold, silver, platinum, and palladium futures markets. Increased investment flows in the current environment could cause significant price appreciation.
GLTR owns a basket of the four leading precious metals
While the direct investment route is via the physical market for bars and coins, the COMEX and NYMEX futures contracts offer another avenue as they have a delivery mechanism.
Meanwhile, the Aberdeen Physical Precious Metals Basket (GLTR) owns the four metals. At $91.70 per share, GLTR had nearly $974 million in assets under management. GLTR is a liquid ETF that trades an average of 40,402 shares daily and charges market participants a 0.60% management fee. In late November, GLTR’s precious metals holdings included:
The chart shows that GLTR’s gold holdings account for over 62% of the ETF’s assets. GLTR invests over 27% in silver and around 10% in palladium and platinum bullion. GLTR’s website outlines specific bar lists for the metals it owns.
Gold is sitting over the $2,000 per ounce level as 2023 winds down. The consolidation could be a launchpad for 2024 that takes gold to a new record high, with the other precious metals following on gold’s coattails.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
