Market essentials /February 2009/
Starting from the end of January, the precious metal markets have been living up to the expectations of the investors for good growth – the quotations for the metals in US dollars grew by 15-20%. The prices in RF rubles also increased, on the average by 6-12% depending on the metal.
The reasons for the growth are associated with stabilization of the situation on the financial market, especially on the currency markets. In the conditions of continuous depreciation of the Euro- US dollar pair, gold started to be viewed as one of the conservative assets. While before the autumn of 2008 the prices of gold and US dollar were, as a rule, on the opposite phases (growth of one coincided with decrease of the other), after the autumn the dynamics of prices for both assets almost completely synchronized. In the absence of “quiet bays” new hedge funds entered gold market, and traded ETF increased their investment by more than 15-20%. Obviously, activity of such investors caused growth of prices for precious metals. Other groups of metals, primarily silver and platinum, also kept getting more expensive, though at slower rates. Silver that is being increasingly viewed as a hedging instrument rather than industrial metal is actively purchased on the market.
In March we expect no significant changes in the nature of price dynamics. It is possible that gold will surpass $1050/ounce limit, but the risk of correction in this case will increase. In the first decade of March a "reversal” in the euro-dollar pair can be expected, that is, dollar can loose up to 10% of its price. In this case, fixation of profits in gold and other precious metals can start. We expect the prices to be in the range of $930-989/ounce throughout March. The platinum prices are expected in the window of $1100-1200/ounce, temporary correction within 10-15% of the present level is possible on the silver market.
Gold will remain the most stable and reliable investment instrument on the precious metal market, and transition of the function of universal equivalent to gold, which has been an obvious trend lately, strengthens its positions even more, at least in the medium term.
Book prices for chemically pure precious metals by RF Central bank for the period of 20/02/09
| Date | Au | Ag | Pt | Pl |
|---|---|---|---|---|
| 03.02.2009 | 1062,79 | 14,55 | 1134,03 | 226,81 |
| 07.02.2009 | 1069,05 | 14,97 | 1148,58 | 236,27 |
| 13.02.2009 | 1056,20 | 14,98 | 1212,84 | 241,67 |
| 20.02.2009 | 1129,60 | 16,30 | 1246,22 | 249,48 |
| 6% | 12% | 10% | 10% |
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