Ukraine, Gaza, Taiwan?

by | 15. Jan 2024 - 11:13 | Spotlight on Precious Metals

The presidential elections in Taiwan have produced an election winner, the previous vice president, who favors independence from China. It should be noted that the pro-Chinese candidate also received a third of the votes. China also emphasized that the election result would not change the plans for unification.

If, after the muscle-flexing and threatening gestures from Beijing to date, military intervention is indeed a possibility, the world must prepare itself for a further split between East and West. One can only speculate about the political and economic consequences, as Taiwan is home to a high-tech industry and supplies the world with the most powerful chips.

Precious metals, and gold and silver in particular, are a safe haven against this backdrop, not least because the Chinese central bank, among others, has made massive use of the gold market, even though China itself is the world’s largest gold producer. Despite the recent sell-off in other metals, gold held up well above the USD 2000 mark, which we see as a strong signal from the yellow metal.

Silver and platinum came under pressure; uncertainties in interest rate policy and economic concerns have left their mark on the two industrial metals. But here, too, the recovery can come anytime in the wake of gold. Both metals are in the process of rebuilding their base.

Palladium, meanwhile, has come to the end of its outing for the time being, losing almost 20 % since Christmas – definitely not for the faint-hearted, and further setbacks are possible in the current year. Parity with platinum is likely to come into focus again and again.

Rhodium has seen some demand in the past week, but how sustainable the rise is remains to be seen. Today is Martin Luther King Day, and the US stock markets are closed. Perhaps the lower liquidity on the market has another surprise in store…

“PGM – Spotlight on Precious Metals” is a commodity column focused on gold and precious metals but mainly dedicated to the widely discussed yet rarely analyzed platinum group metals (PGM). Focused on the industrial applications of the metals as well as their potential as tangible assets, the abbreviation PGM has a twofold significance: With Philipp Götzl-Mamba, we could win an experienced precious metal trader operating at the cutting edge of the industry, sharing his knowledge with us.

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