Precious metals in 2017: palladium wins, gold comes second, silver and platinum lag behind

Not all precious metals were equal in generating value in 2017. As of December 18, 2017, silver and platinum were practically flat over the past 12 months, while gold returned more than 10% and palladium was a clear winner having generated a return of about 50%.

Gold, Palladium (green), Silver (blue) and Platinum (red) over the past 12 months (source: bloomberg.com)

In late November - early December, gold, platinum and silver dropped sharply on the expectations of further interest rate hikes by the Federal Reserve and the resultant strength of the US dollar. 

Palladium, which is now more expensive than platinum for the first time since the first half of 2001, has been rising due to its application in the car manufacturing and the ongoing supply deficit.

In 2018, the price of gold will depend, in particular, on whether future interest rate hikes have already been accounted for in its price. As some experts note, the future direction of the US dollar is now uncertain, while the U.S. dollar and gold prices tend to move in opposite directions. Something similar can be said about stocks – if the stock market rally grinds to a halt, it may be beneficial for gold. And, as usual, gold will likely trace developments in the geopolitical arena.

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