Tuesday, December 24, 2013

Heraeus Market Report

Good Morning,

It’s Christmas Eve here in NYC and the subways are practically empty! It made my morning commute much more pleasant J As we approach year end, economists have been predicting what the precious metals outlook will be like for the PGMS in 2014. It looks like we can expect to see greater auto catalyst demand in RH. As a result, we may see some tightening of the RH market next year and this should help bring the metal up from current levels. The PT deficit is expected to continue next year due to South Africa restructuring its supply. This should help elevate PT prices, but the metal will experience some pressure due to weaker AU prices resulting from the beginning of the end of quantitative easing. We expect to see PD’s supply deficit remain, but not to levels PT will encounter. Gold has been trading flat in the $1200 region due to slower activity with the holidays around the corner. Investor sentiment remains bearish towards the gold unless something outrageous happens to spur demand for the shiny yellow metal. The question to ask here is how low can gold really go? We know tapering has begun and will most likely continue, but the price drop will have to end somewhere. If the price of AU falls below the cost of extracting AU from the ground, producers will simply halt production. If supply decreases then price should increase. I guess supply and demand will be significant factors to take into account when predicting gold’s path for next year. The stock market is in a Santa Clause rally but is seeing light volume due to the holidays. The stock market closes at 1:00 p.m. today and is closed tomorrow. Please note there are no PM fixings today. I wish everyone and their families a very Merry Christmas!!!


Simple Sahni
Assistant Trader

Heraeus Metals New York LLC