By Steve Fiscor, Editor-in-Chief
Market fundamentals are working against miners. Investor confidence, especially with the U.S. equities market, and an improving sentiment toward the U.S. economy are driving precious metal prices lower. According to the E&MJ Price Index (below), gold closed at $1,214.30/oz on October 2–its lowest level for the year. If the trend continues, and in all likelihood it will, gold will fall below the $1,200/oz threshold. Gold started the month trading at $1,289.30/oz and lost $74.90/oz during the month or 5.8%.
The numbers were worse for platinum and silver. Platinum began the month trading at $1,430/oz, lost $159/oz or 11.1% to finish at $1,271/oz. Silver currently stands at $17.10/oz. It started the month at $19.40/oz and lost $2.38/oz in value throughout the month or 12.3%.
For non-ferrous base metals, the trend was similar, although not nearly as dramatic for all of the metals. In this situation, softening demand for commodities rather than investor confidence is causing a retreat in prices. A slowing Chinese economy is having an impact on stocks and prices worldwide. Aluminum dropped from $2,108/metric ton (mt or $0.96/lb) to $1,869.50/mt ($0.85/lb), a loss of $238.50/mt ($0.11/lb) or 11.3%. Copper dropped from $7,033/mt ($3.20/lb) to $6,693.50/mt ($3.04/lb), a loss of $339.50/mt ($0.16/lb) or 4.8%. Lead prices fell $176.50/mt ($0.08/lb) or 7.8% from $2,254.50/mt ($1.02/lb) to $2,078/mt ($0.94/lb). At 13.9%, nickel had the largest percentage drop falling $2,600/mt ($1.18/lb) from $18,650/mt ($8.48/lb) to $16,050/mt ($7.30/lb).Zinc prices dropped to $2,252.50/mt ($1.02/lb) from $2,359.50/mt ($1.07/lb) or $107/mt ($0.05/lb) or 4.5%. Tin was the exception that proved the rule. Tin prices gained $625/mt ($0.28/lb) or 2.9% during the month to finish at $22,425/mt ($10.19/lb) up from $21,800/mt ($9.91/lb).
As far as minor metals, molybdenum finished at $23,500/mt down $5,500/mt (or 19%) from $29,000/mt at the beginning of the month. Cobalt was relatively flat, finishing $150/mt lower.
Iron ore prices continue to sag. During September, iron prices pierced the $80/lb threshold. Iron ore prices fell to $79.50/lb from $87.25/lb, losing $7.75/lb or 8.9% of its value.