Silver outperformed gold in November
According to the Commodity Market Analysis System of Business Society, the spot market price of gold on November 30, 2023 was 474.61 yuan/gram, a decrease of 0.46% compared to the spot market price of gold at the beginning of this month (November 1), which was 476.80 yuan/gram.
According to the Commodity Market Analysis System of Shengyishe, the average silver market price on November 30, 2023 was 6110.33 yuan/kg, an increase of 6.16% compared to the average silver market price of 5756 yuan/kg at the beginning of this month (November 1).
Overview of Price Trends of Precious Metals and Crude Oil
Comparison of price trends of precious metals such as gold and silver in the past year
From November 2022 to early February 2023, precious metal prices significantly increased. From March to the end of April, due to the impact of the US banking crisis, precious metal prices once again entered a period of skyrocketing. Silver prices began to fall in May, while gold remained relatively strong. In June, gold prices hit a high level and silver prices began to rise. After July, gold prices became stronger. In mid to late September, precious metal prices were affected by news from the Federal Reserve, leading to a high level correction. In October, due to geopolitical factors, the risk aversion sentiment rose and continued to rise. In early November, the high range was weak and fluctuated horizontally. At the end of the month, precious metal prices resumed, and silver saw a stronger monthly increase than gold.
| Azodicarbonamide (AC foaming Agent) |
Silver outperformed gold in November, mainly due to strong physical demand for silver:
On the demand side, based on the current strong performance of the photovoltaic sector and the expectation of continuous improvement in the future, the demand outlook for silver in this sector is significantly stronger, and the global demand for silver industry is expected to increase in 2023. Although the total demand is not as high as last year, industrial demand is strong. In 2023, the global photovoltaic installed capacity will approach 400GW for the first time, and silver demand in various aspects such as photovoltaic cell production, automotive electrification, 5G network investment, and ethylene oxide catalyst manufacturing will show an increasing trend.
On the supply side, during the second to third quarters, the Pe ñ asquito mine suspended production due to a strike, which affected Mexico’s silver production. Although the increase in silver production in mines in Bolivia and Chile has to some extent offset the decline in production in Mexico. However, the overall production of mineral silver in 2023 is still declining, and the increment of silver mining is very limited after 2025. Currently, silver inventory continues to decrease.
In terms of imports and exports, India’s performance in October was impressive, with India’s silver imports reaching 1829 tons in October, setting a new high in monthly imports since 2013.
Future Market Forecast
1. Inflation falls and expectations of interest rate hikes weaken. Precious metals have positive expectations
According to CME’s Federal Reserve Observation, the probability of the Federal Reserve maintaining interest rates in the 5.25% -5.50% range in December is 96.8%, and the probability of a 25 basis point rate hike is 3.2%. The probability of maintaining interest rates unchanged by February next year is 88.8%, the probability of a cumulative 25 basis point hike is 10.9%, and the probability of a cumulative 50 basis point hike is 0.3%
On Tuesday evening, two Federal Reserve officials rarely talked about the issue of interest rate cuts in their speeches. Federal Reserve Director Bowman stated that if progress is made in reducing inflation, interest rate cuts can begin in a few more months; The 23rd Federal Reserve vote committee, Chicago Fed’s Goolsby, also hinted this morning that interest rates need to be lowered. The expectation of the Federal Reserve lowering interest rates in 24 years has increased, and the probability of maintaining interest rates unchanged within the year has increased. Inflation expectations and US bond rates have significantly weakened, which has also to some extent boosted precious metal prices.
2. Strong physical demand supports high prices
At present, the price of precious metals has been fluctuating in the high range after reaching a new decade high in the early stage. Under the high inflation and high interest rate hikes we anticipated earlier, the pace of overseas economic recession may lead to a relatively strong sense of risk aversion, which is currently reflected in prices. Some central banks around the world have increased their holdings of gold reserves, which has also provided some support for gold prices. The industrial demand for silver also supports prices to remain high.
In summary, the recent expectation of the Federal Reserve lowering interest rates for 24 years has increased, and strong physical demand has boosted precious metal prices. In November, the US dollar index fell more than 3% from its high level, while the appreciation of the Chinese yuan at its low level was less than 3%. Overall, the US dollar index drove the passive appreciation of the Chinese yuan, which will definitely suppress the valuation of precious metals in the Chinese yuan. However, silver currency has weak attributes, good price elasticity, and is less affected by exchange rates. The overall price increase of silver is stronger than that of precious metal gold, and it is expected that precious metals will operate stronger in the short term.
| http://www.lubonchem.com/ |