COVID-19 Impacts To Metals Prices: Volatility Is Here To Stay – Part 2 – S&P Global



In this part, we use S&P Global Market Intelligence data and insight to look at how the metal price environment for the precious metals and uranium has evolved during the COVID-19 pandemic. While the gold price dropped mid-March along with those for most other commodities and markets, it has since come back strongly on the back of higher financial investment demand. Meanwhile, silver, despite record retail investment, has sunk to its lowest price in 11 years due to lower industrial demand. Looking at the platinum group metals, or PGM, lockdowns in South Africa and plummeting global auto sales have severely shocked prices. This disruption has kept an uneasy balance, however, and has not yet fundamentally changed the price trajectories of upward for palladium and rhodium, and downward for platinum.

Gold: After the fall, time to shine

Despite being the archetypal safe-haven asset, gold, like everything else, eventually took a hit to the downside on the realization that COVID-19 would become a global pandemic. Through mid-February, gold continued in its slow-burn bull market, driven by two main factors. The first was safe-haven buying resulting from global uncertainty, tied to the shutdown in China up to that point, and also the ongoing U.S.-China trade war and eurozone weakness. The second was low to negative yields on high-quality government bonds. When funds have to pay for lending to governments, the attractiveness of gold increases, especially when the cost to hold is at a historical low.

While gold performed well in the lead-up to the
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