Improving demand and lower supply will help palladium and rhodium swing back into deficit this year and reduce platinum’s surplus, consultants Metals Focus said on Monday. The three precious metals are used by automakers in engine exhaust systems, where they neutralise harmful emissions. Platinum is also used in other industries and for jewellery and investment. By Zandi Shabalala for Reuters

After nearly rising to a record high in early March, the US gold price has lost significant ground — down more than 10% or $200 from its peak. “The sell-off accelerated in the last two weeks in the run-up to the Fed rate decision on 4th May and in its aftermath as gold’s traditional negative correlation with the US dollar re-emerged; bond yields, both nominal and real have also risen notably,” Metals Focus says. By Reuben Adams for Stockhead

As long as there are uncertainties about global growth and inflation there could be phases where gold prices will gain because equities are likely to stay under pressure, said Harshal Barot, a senior research consultant for South Asia at Metals Focus. The base case, though, is that the bullion is likely to be under pressure, Barot said. European stocks headed for their worst week in two months as investors expect bigger interest rate hikes will be needed to rein in inflation. By Eileen Soreng for Reuters News

“silver demand (due to industrial offtake) this year appears on track to achieve a new high… This, along with limited supply growth, will result in a widening deficit in 2022,” analysts at Metals Focus said in a note. By Seher Dareen for Reuters

The market had already seen silver industrial demand start to recover during the second half of 2020 and “last year saw a continuation of much of this trend,” Philip Newman, managing director at Metals Focus, told MarketWatch. Industrial demand also managed to reach a new high despite the ongoing chip shortage and other supply-related disruptions, he said. By Myra P. Saefong for Market Watch

Yesterday, prices briefly spiked to $US1,980 – a one month high — as soaring inflation, COVID issues in China, and the Russia-Ukraine drove investors into safe havens. “Ultimately, we believe that gold prices will remain well supported in the coming months, assisted by prospects that inflationary pressure will last for longer as well as the persistence of geopolitical tensions,” Metals Focus says. By Reuben Adams for Stockhead

There are several reasons why the war in Ukraine has and will likely continue to support precious metals prices. First, the extent of the conflict, its proximity to Western Europe and the risk that it could spread to include other countries, whether intentionally or accidentally, have all pushed investors towards defensive assets. This has been particularly supportive of gold, that rallied to levels not far off its 2020 peak (in US dollar terms), and to a lesser extent silver and platinum. By Nikos Kavalis, Managing Director, Metals Focus

Adam Webb, Director of Mine Supply at Metals Focus noted “Average margins were squeezed by these rising costs, but remain high on a historical basis. Despite a 6% y-o-y reduction, at US731/oz they remained comfortably above the peak of US$552/oz reached in 2012, during the last bull run in gold.” He also added, “Should the gold price remain strong in 2022 then gold miners should continue to generate high margins, notwithstanding further pressure from continued cost inflation.” By Rajan Dhall for Kitco News

Experts at both Metals Focus and the World Gold Council believe that global reserves and the insulated nature of the gold market will prevent any significant supply challenges. “There is plenty of gold identified in current reserves and resources to sustain production at current levels for many years to come,” said Webb. “At the end of 2020, identified reserves were capable of supporting current production levels for 14 years, and identified resources were potentially able to support an additional 31 years of global production.” By Georgia Williams for Investing News

U.K.-based precious metals consultancy, Metals Focus, puts Russian output marginally higher than that of Australia, or at least it did in 2020; we are waiting for the latest report from the firm. According to the firm, Australian gold production in 2021 totaled 315 tonnes or 10.1 million ounces. This was lower than the peak production levels recorded in 2019 and 2020. The consultancy put local gold output for the first half of the 2021 year slightly ahead of China, but this was not sustained later in the year, so according to Surbiton’s figures, Australia remains in second place globally. By Rajan Dhall for Kitco News

Russia is the equal 5th largest silver producer in the world — alongside Australia and Poland — producing 1,300t of the precious and industrial metal in 2021. Metals Focus now says Russian production will remain flat in 2022 – a downward revision from initial forecasts – after the suspension of Toronto-based Kinross Gold’s Russian operations. This mainly concerns their ‘Kupol’ mine, which produced 3.3Moz (~100t) silver in 2021. By Reuben Adams for Stockhead

“M&A in the gold sector peaked in 2010 at US$32 billion, so last year’s activity was still around US$10 billion lower than record annual levels,” Adam Webb of Metals Focus told the Investing News Network (INN). “However, it was still a relatively strong year for M&A in the gold-mining sector, and we expect this to continue into 2022.” By Georgia Williams for Investing News

“Compared with pre-pandemic norms, we had expected palladium automotive demand to be just 2% short of the 2019 total and rhodium actually exceeding that year’s demand by 2%, despite a forecast of 8M fewer ICE cars being produced,” Metals Focus said in a note last week. By Josh Chiat for Stockhead

Russia is the world’s third largest gold producer, mining around 330 tonnes each year worth around $20 billion at current prices, according to consultants Metals Focus. It produces around 1,350 tonnes of silver a year worth about $1 billion. By Peter Hobson for Investing.com

Metals Focus, a leading independent precious metals consultancy, reported today that the recovery in western jewelry demand during 2021 gathered pace, with early indicators for 2022 show strength persisting. According to the report, the US jewelry market has long been running well, with imports not just up y/y but well ahead of more representative 2019 levels since June. By Vladimir Basov for Kitco News

“There is no doubt that unless the situation is defused quickly, there will be frictions in all Russian trade and this will affect palladium,” said Nikos Kavalis, managing director at Metals Focus Ltd. “Over time ways to overcome them would emerge, whether this through ever more complicated routes, shipments to China or other consuming countries.” By Yuliya Fedorinova, Eddie Spence and Ranjeetha Pakiam for Bloomberg