Beyond Gold: Here’s What Is Happening with Metals Prices

National Jeweler looks at how platinum, silver and palladium have fared so far in 2020.

Brecken Branstrator brecken.branstrator@nationaljeweler.com

Though the platinum price plunged at the start of the COVID-19 lockdowns, it has since risen steadily. Pictured here is Platinum Born’s “Sunrise Bar” necklace.

New York—The gold price is one thing that has benefited from the coronavirus pandemic.

It passed the $2,000-per-ounce threshold in early August, though it has fluctuated a bit since then, tempered by the recent drop in unemployment claims and a rebounding U.S. dollar, according to Kitco.

Still, several experts believe the gold price will top $2,000 again this year and in the future.

But what about the other metals used for fine jewelry? How have the pandemic and associated economic struggles affected them?

Platinum

Platinum plunged to a low of about $599 per ounce in March as lockdowns began to take effect but has risen 58 percent since then, outperforming gold’s 32 percent increase in that time, according to the World Platinum Investment Council.

It added that the platinum market has improved greatly in 2020 as strong Chinese platinum imports, bar and coin demand, and its use in catalysts for diesel vehicles improved investor sentiment.

Additionally, with the gold price’s recent back-and-forth, investors have been paying even more attention to the more affordable white metal, Kitco noted, giving it plenty of upside.

Still, the metal is nearly half the price of gold—platinum neared the $1,000-per-ounce price in mid-August, but closed at $898 per ounce on Tuesday, according to the London Fix—and continues to buck the trend in precious metals pricing.

In terms of mining, according to investment website Seeking Alpha, both COVID-19 and the metal’s low price are making production less economical, with output down 20 percent in South Africa, which produces 80 percent of the world’s platinum annually.

Platinum jewelry sales, meanwhile, were severely hampered in the second quarter due to the pandemic, according to the latest Platinum Jewellery Business Review, which did note positive signs of recovery, including in the Chinese market.

Silver

The silver price has been increasing at a steady clip in 2020 due to rising inflation.

Gold and silver market Bullion Vault said it has nearly doubled its average monthly per-ounce price between February and August, growing nearly 32 percent alone in the month of August, its fastest since April 1987.

The London Fix had the silver price listed at $26.83 at market closing Tuesday.

Analysts expect it to continue to rise through 2020, with one expert noting it could reach $50 per ounce by year-end.

Despite outperforming even gold lately, silver is still relatively cheap when compared to gold.

The gold/silver ratio is currently around 72.5, meaning it takes nearly 73 ounces of silver to buy one ounce of gold. The ratio, historically, has rested around 59.

As for the silver jewelry outlook, there seems to be some pent-up demand for pieces made with the metal.

According to a recent survey fielded by MVI Marketing, 64 percent of consumers polled said they still plan to buy jewelry gifts they needed or wanted during quarantine, and 50 percent of those who will buy “just because” said the jewelry purchased would be silver.

Palladium

After years of increasing, palladium prices have come to a standstill during the pandemic as car sales slowed. (Most fabrication demand for the metal comes from its use for automobile catalytic converters.)

Palladium was at $2,310 per ounce Tuesday, and the price is expected to remain under pressure.

But the metal is also coming off a strong year.

Investing News reported a 54 percent increase in the palladium price in 2019. It overtook gold for the first time in 16 years, hitting a record high of near $2,000 per ounce in December.

Banner will be right here …

Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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