Platinum and Palladium Supply Shortage

Heraeus Market Report

Very bullish news yesterday from the release of research by Johnson Matthey which indicates shortfall across all the platinum group metals. They are looking for shortfall of supply for platinum of roughly 1.13mm and in palladium 1.62mm ounces. Of course investment money is looked upon as demand and others view it also as above ground stocks which in platinum ETF holds roughly 2.67mm and palladium 2.98mm ounces of metal. Still this is bullish news for these white metals as auto sector demand continues to grow. Interestingly, Rhodium they also expect to end in deficit this year by 548k ounces against rising auto demand and meanwhile the ETP only holds a little more than 17k in metal. A very bullish signal for this white metal. Today Pt and Pd are holding their ground against the very good GDP report out of the USA this morning at 3.9% higher than expectations by .7%. Initially gold and silver came off on the bullish news for the US dollar and US investments but have since recovered some ground from the initial knee jerk reaction. The continued resilience of gold and silver against bearish news has surprised many traders. Good buying whether short covering or new longs from bargain hunters are slowly building a strong base for the metals. Expect the rest of the day to be quiet and tomorrow’s Durable Goods Orders release will be the last event of note before the Thanksgiving day holiday this week.

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Weekly Precious Metals Report

Heraeus Weekly Report

GOLD

Gold could hold the price gains of the previous week and has not only been defending support at 1,180 $/oz successfully but also closed marginally above the 1,200 $/oz mark.  The metal thus recorded a weekly gain of 1%. After significantly increased gold imports in Q3 to India there are new discussions on regulatory measures like an increase of import duties. The latter is currently discussed by the Indian Central bank and the government for the purpose of compensation of the trade balance and an adjustment is expected shortly so that demand from India will suffer. Support was seen through central bank purchases: as for example the Russian Central bank explained last week that Gold makes up 10% of their reserves and that this year so far 150 tons have already been purchased. The Dutch central bank in turn got itself much talked about after pulling back gold from the US and returning it to Amsterdam.  (Read more...)

Real Competition For The IMF

China to Establish $40 Billion Silk Road Infrastructure Fund

(Reuters) - China will contribute $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the largesse of its own economic growth.

China has dangled financial and trade incentives before, mostly to Central Asia but also to countries in South Asia, backing efforts to resurrect the old Silk Road trading route that once carried treasures between China and the Mediterranean.

The fund will be for investing in infrastructure, resources and industrial and financial cooperation, among other projects, Xi said, according to Xinhua.   Read article...
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The global monetary system is changing and there is a reason why China and Russia are buying so much gold, maybe they plan to back a new currency with it?   BK

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