Global growth and the automomobile sector, major drivers for metals in 2017

After relatively good movements during the year for silver and platinum, the two metals seem to be heading towards negative yields. Gold does not stay behind, with the fall in recent days bringing annual yields down to less than 10%. The main reason for the decline in gold is the rising stock market and the ever-growing world economy. Factors that increase risk appetite and reduce the need for hedging tools like gold.

Platinum suffered mainly because of the significant drop in the production of diesel cars using our platinum-based catalysts. The metal has the greatest growth in Lithia, as the craze of electric cars, and now also trucks, is still unfolding. Orders grow every day, and manufacturers are barely able to develop enough models to meet customer requirements. Lithium is a major ingredient in these vehicles' batteries, and given the strong will to fully transform the Global X Lithium ETF automotive sector, which follows lithium mining companies, has grown to nearly 70% and is currently at levels between 55 and 60%.

Palladium will also end the year on a positive territory, close to 50% return for the year, with the automotive sector and the rising number of gasoline vehicles (including hybrids) using palladium catalyst.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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