Palladium And Platinum Prices Nose-Dive As Precious Metals Weakness Continues

Singapore (July 30)  The latest Chinese stock market sell-off is hurting commodities. Energy prices got hit the most, with oil prices falling below $50/barrel, followed by those of precious metals. Gold prices hit a 5-year low, falling as much as 8% in July; silver of course, followed, because metal price correlation is still an important factor to account for.

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Platinum prices fell as much as 12% this month:

Platinum price since 2013. Graph: MetalMiner

Despite most analysts predicting a deficit, this precious metal has done nothing but fall during the past few years. The metal is down 35% this year.

Production Up

One factor putting the market under pressure is South African production of platinum, which accounts for more than 70% of the world's supply, which has returned to levels above those of the five-month strike in 2014.

Palladium prices fell as much as 14% this month:

Palladium price since 2013. Graph: MetalMiner

Palladium was the best performer among precious metals until just about a year ago, when it started to fall too. The metal is down 32% this year, with an impressive decline over the past two months.

Unlike platinum, palladium finds more application in gasoline engines, and is, therefore, more exposed to the Chinese and US automotive markets than to the European markets. The slowdown of the Chinese automotive market over the past few months might help explain the sharp price decline.

Source: SeekingAlpha