Spot Metal

The silver trading price is affected by many factors. Here are a few:

As a natural resource, silver has to be mined from the ground. As such its supply is often inconsistent with demand leading to fluctuations in its price. In recent years, Mexico was the world’s main silver miner, with some 5,000 metric tons produced in 2014. The USA is the world’s leading consumer of silver with about 20%, and India and China are in second place with approximately 18%.

Use of silver divides to different areas; more than 50% of mined silver goes to the movie industry, used to create sensitive materials reflecting the light. Other uses are in different industries, including military – about 500 ounces of silver are used in every tomahawk missile. Only 3% goes to the jewelry industry. Demand from any of these sectors leads to a change its price.

Around 50% of platinum consumption, perhaps even a little more, goes to the jewellery industry. However, due to high concentration and its components, only in the last decades people learned how to properly melt and use platinum for jewellery. Platinum is also used as an important and almost irreplaceable component of catalytic converters in fuel engines. Other industries such as medicine use platinum, but in much lower figures. Most of the platinum mined nowadays, a little over 80%, comes from Africa. The majority of the rest is divided between Russia and North America. The trading of platinum is global, as it is traded from the New York Mercantile Exchange (NYMEX), through the Chicago Board of Trade (eCBOT) and all the way to Asia with the Tokyo Commodity Exchange (TOCOM). The platinum market is open for trading from 22:00 to 20:59 GMT.

The platinum price saw large changes over the years, and there are a few factors that cause changes in its value: It is not uncommon to compare the price of platinum to the price of gold. When the financial markets are stable platinum is estimated to be worth about twice the price of gold. However, when the price of gold goes up usually the price of platinum goes down. Often the 2 assets have an inverse relationship to each other – when one goes up the other goes down. As mentioned before, platinum is a very rare natural resource. As such, its price is affected by the supply and demands; meaning the amount of platinum mined compared to the needs for it in the world. Due to its uniqueness, most of it goes to specific industries. A change in one of them can create major shifts in the platinum value. For instance – as mentioned before, platinum is used in engines. If, as part of the global trend of green energies, companies will reduce the use of motored engines, the value of platinum can drop.

The palladium market is open from 23:00 to 21:59 GMT Monday to Friday, and is traded on the New York Mercantile Exchange (NYMEX). Most of the Palladium mined, around 60%, goes to the auto industry. Other consumers of palladium are jewellery, electronics and dentistry. The price of palladium is determined against the USD, even though most of the mined palladium doesn’t come from the US. Palladium is counted in Troy Ounce, and the minimal amount needed to commence a trade is one ounce.

As one of the rarest metals that exist on the planet, its price had seen fluctuations that might not be common for most instruments. From a price of 168 USD in 2001, palladium rose to 858 USD in 2005 – a span of about 4 years, a change of over 500%. So what can cause changes in palladium price? As Russia supplies nearly 50% of the global usage of palladium, and another 30% is provided by South Africa, they gain control over the market and can affect the price. Another part is that Russia refuses to reveal how much palladium they have stored and how much is mined; therefore it is unknown how much they will supply in future years. Low estimates can bring on a rise in price.

The general political and economic state can always affect the different markets; however the fact that two countries only are the main suppliers has even more risks. A change that will affect one of them, especially Russia, can cause an upheaval in the palladium market. It is important to remember that often metals are linked to one another, so a dramatic change of palladium price might also result in other metals’ prices changing. As mentioned before; some 60% of palladium usage goes to the auto industry. As more people buy and use cars, the price of palladium will rise as the demand rises. It is also true, naturally, to other industries who consume palladium, but as the auto industry is the main one by far, it has the most effect on its price.

Metals instruments (gold, silver, platinum, palladium) quotes and trading functionality are active from 18:00 ET on Sunday until 16:55 ET on Friday. Metals exchanges close daily from 16:59 until 18:00 ET, during which quotes and trading are unavailable.