Refinery services provider Heraeus finds in its latest precious metals review that the gold price is showing signs of relaxation at $3 356/oz, having fallen by about 1.6% in the week to June 20.

Heraeus explains that the price of gold spiked as an initial reaction to the US attacks on Iran, but gold prices have been easing compared with white metals.

The US baseline interest rate has held firm at 4.5%, but the outlook for the rest of the year has changed, Heraeus explains.

The company says two camps are beginning to emerge: those in the committee who believe there should be 50 basis points of cuts before year-end and those that see rates staying where they are.

The emergence of the latter since the last Federal Open Market Committee meeting helped to strengthen the dollar somewhat.

“The message from Federal Reserve chairperson Jerome Powell was that further cuts to interest rates will not begin until the Fed is more confident that US President Donald Trump’s tariff regime is not significantly contributing to higher inflation.

“Interest swaps traders are still biased towards a two-cut scenario by December. This would be the most advantageous outcome for the gold price, as two further interest rate cuts would likely result in a weaker dollar, which could support the gold price,” Heraeus states.

Meanwhile, Heraeus says silver is seeing a rotation into investment demand from gold, similar to what is happening with platinum.

In the first five months of the year, silver exchange-traded fund (ETF) holdings growth was lagging gold as gold benefited from safe-haven demand and momentum trading as the price rallied.

Since then, however, silver has taken the lead.

Holdings of silver in ETFs have grown strongly in June, with holdings having grown by 18.2-million ounces to 759-million ounces in the first two weeks.

Year-to-date inflows of silver total nearly 41-million ounces, which is proportionally a much greater growth rate than gold.

Industrial silver demand, which is the largest end-use segment, is predicted to decline marginally this year to 677-million ounces, largely owing to expected reductions in the use of silver in solar PV applications. However, on a historical basis, total demand is still 19% above the ten-year average.

For the third week in a row, the silver price reached a higher-high, this time temporarily moving above $37/oz. However, by the end of the week ended June 20, silver had retreated below $36/oz, which amounts to a week-on-week loss of 0.65%.

Moreover, Heraeus reports that platinum’s investment options are helping to drive the price.

With the gold price stalled around resistance below $3 450/oz, speculators and investors have turned to platinum as an alternative, particularly as the ratio still allows purchases of nearly three times the volume of platinum to gold for the same price.

In the futures market, open interest in platinum futures has grown by 34% to gold’s 2% since the beginning of May. Likewise, ETF holdings of platinum have grown, by 1.17% to 3.22-million ounces.

Global gold ETF holdings have seen only a marginal increase of less than 0.5% over the same period. This indicates that proportionally, platinum is now receiving more attention – largely owing to its price action – and “fear of missing out” trades may be kicking in, Heraeus says.  

So far in June, the platinum price is up more than 20%, and in the week of June 20 surpassed the 2021 high of $1 339/oz to reach a more than ten-year high.

However, the latest net speculators’ positioning is now showing that long positions are reaching an extreme, which usually coincides with a peak in the price.

Therefore, the price may begin to correct shortly.

The palladium price did not move much in the week of June 20, closing just $7 higher week-on-week at $1 050/oz. Heraeus says Chinese palladium autocatalyst demand may drop by 2% this year, while battery-electric vehicle sales have grown by 48% in the year-to-date, which erodes platinum and palladium demand.

Lastly, rhodium prices dropped slightly to $5 900/oz in the week of June 20, but is still 15.7% higher in the year-to-date. Iridium and ruthenium prices remained stable week-on-week at $4 850/oz and $715/oz, respectively.