Gold price shows relative strength, Palladium rises strongly

The gold price appears comparatively robust in view of the strong equity markets, the firm US dollar and rather muted physical demand of late and is trading largely unchanged at just shy of $1,310 per troy ounce this morning. Gold in euros is now trading at €980 per troy ounce and thus noticeably higher than at the beginning of the month. The price is clearly finding support from the numerous sources of geopolitical tension, which in our view should also prevent any significant price fall.

Silver has climbed above the $20 per troy ounce mark again, at least for the time being.

Of all the precious metals, it was palladium that achieved the biggest gains yesterday, rising by 1.9% to around $875 per troy ounce. As the China Association of Automobile Manufacturers announced at the end of last week, 1.36 million cars were sold in China in July. Although this was down 13% on the previous month, it was 10% higher than the year-on-year figure. The summer months are regarded as a season of lower sales on account of the hot weather – when car sales pick up again in the autumn, however, China should be well on track to selling more than 19 million cars in total this year. Because the Chinese car market is gasoline-dominated, this should be reflected in robust demand for palladium.