Has gold broken its September curse, is it time to look at silver and platinum

(Kitco News) - At the start of the month, we warned investors that September can be a difficult month for the precious metals market in recent history; well, I think it is safe to say that, at least for this year, that seasonal curse has been broken.

I know I am breaking the first rule of curses by talking about it, but I feel like this one is in the bag… or these might be the most famous last words on record.

This week, December gold futures touched $2,700 an ounce, and while the price is down nearly 1% from those record highs, it still has plenty of potential. Even with Friday’s selloff, the precious metal is seeing a record weekly close around $2,670 an ounce. At the same time, prices are up 5.6% this month.

Gold is looking at its best monthly gain since March, when this unprecedented run of consecutive record highs started.

Gold’s run is impressive, and while it gets a lot of attention, it’s time to look at other precious metals. While silver has seen some messy volatility in recent weeks, it is starting to attract new momentum.

Silver is ending Friday with some solid selling pressure after prices rallied to a new 12-year high at $33 an ounce. December silver futures last traded at $31.74 an ounce, down nearly 2% on the day. But when we stretch out the time frame, silver prices are up 4.6% since last week and up 8.8% for the month.

For the year, gold prices have rallied 28.8%, while silver prices are up nearly 32%.

Silver saw renewed momentum this week after China launched its most impressive stimulus package since the global economy was devastated by the COVID-19 pandemic. The government is pumping more liquidity into financial markets and cutting interest rates to try to pull its economy out of a deflationary spiral and back toward its growth target.

China’s efforts to support its economy are good news because one of its biggest industries remains photovoltaic solar panel manufacturing, which requires a lot of silver. Nearly 50% of demand for silver comes from industrial applications, with most of that demand from the solar power sector.

According to the Silver Institute, silver demand in photovoltaic solar panels is projected to represent about 19% of global silver demand this year, equivalent to 232 million ounces.

However, despite these positive steps, there is some bad news. According to some analysts, China’s stimulus measures appear to be coming too late and might not be enough. Economists at Capital Economics estimate these measures could lift GDP by around 0.4 percentage points.

“The stimulus measures are no silver bullet for the structural headwinds to the sector, so we think the stimulus-inspired turnaround in industrial metals prices is likely to prove short-lived,” said Kieran Tompkins, Climate and Commodities Economist at Capital Economics, in a note Friday.

Moving further along the value chain, it appears platinum is also starting to make a move. October platinum futures are looking to end the week above $1,000 an ounce. Prices are trading at their highest level in nearly 10 weeks.

Platinum is becoming an attractive asset to watch as some analysts see the metal as significantly undervalued when looking at its fundamentals.

This week, the World Platinum Investment Council increased its long-term deficit projections. Platinum’s supply deficit is expected to average around 769,000 ounces between 2025 and 2028, a downward revision from January’s long-term projected average deficit of 546,000 ounces.

“All told, the compelling elements of resilient demand, supply-side risks, and a depleting stockpile combine to underpin platinum’s attractive investment case,” the analysts at WPIC said in the report.