Metals Minute 175: Oil & Metals Headed Higher
Gold has edged lower over the last week, down 2.6% to $1,885. Silver is 4.9% lower at $22.64, with platinum 3.3% lower at $1,005 and palladium down 3% to $1,684.
From a year ago today, gold is up 3.2%, silver is down 2.4%, platinum is 3.5% lower, with palladium off 25.3%. What looks like a global recession is clearly impacting demand for the white industrial metal (palladium) needed for automobile production.
The World Gold Council has corrected a previous report stating that world central banks have purchased the most gold “in decades.” The revised report indicates that gold buying reached the highest levels “on record”, in 2022. Gold buying at these levels has prefaced a shift in the global financial system in years past and provides further support for the “financial reset” narrative.
The price of oil impacts future inflation levels in many sectors of the economy. While recessionary conditions often signal a lower oil price due to lessened demand for oil, supply constraints are indicating higher oil prices are likely as the economy slows. This is similar to the stagflationary conditions at work in the mid-1970s that saw gold and silver increase 5-8x in just a few years. It is hard to store oil, but wise to store precious metals.