Gold and silver ran up a little too quickly, said Kitco’s precious metal division head, Peter Hug.

by birtanpublished on September 2, 2020

He's peter hogg director of precious metals here at kikko peter welcome back it's good to be here michael uh everybody was predicting this uh precious metal correction looks like we had one this week

Yeah i think i think we saw the capitulation yesterday uh not discounting what the movement uh that occurred during new york trading hours yesterday but overnight silver touched down south of just 24.

Traded at about 23.90 and gold traded all the way down to 18 uh my memory serves me around 1879. so i think we had the capitulation and uh now i'd be looking for some consolidation at these levels but uh but

I think the the initial panic selling phase ended yesterday have we found a range yet or is it just too early to say i well i think it's early i i i want to see if gold can consolidate here around the

2011 high which was 19 and a quarter and you know silver can hold sort of the 25 range which i think it will um i'm still uh very bullish this market absolutely nothing has changed since yesterday unless you

Believe that putin has the magic cure and he's going to give it to north america and obviously the world currently is skeptical on that but taking putin's comments out of uh out of the equation yesterday

Other than this market was just frenetic and a little manic on silver's run up to thirty dollars and gold's run up to almost twenty one hundred dollars a little too quickly in my opinion uh

When the profit-taking set in it was just a very small door everybody trying to get out and then as the markets moved lower people that were in at higher prices

Were getting margin calls in the afternoon just accelerated the selling so i think it's cleaned itself out uh but again i'd like to see some consolidation between now and the

End of the week at these levels uh and then i think the uptrend will continue again next week uh the bit of news that we have had is uh congress looks like it's not going to be able to pass a stimulus uh there's

Something that the white house is doing right now uh there has been mixed reviews to say the best regarding what trump administration has been able to do outside of

Congress but if there is going to be a stimulus that looks like that's going to be a couple of weeks out what do you see that being the impact on the larger market and precious metals again there my signals aren't so much on

The metal side i'm looking at the equity market and so far they're shrugging it off they think something is going to be done um otherwise i don't think you'd have the dow up in two consecutive

Well yesterday it dropped right at the close but this this morning or by the close today we're up almost 300 points so there's no fear yet there that that doesn't mean that that's also

Not sort of in a bubble and manic stage but but i'm taking my cues from the stock market and right now it still looks like there is uh no fear present and in in that indicates to me that the big money

Is at least believing that there is going to be further action taken by the government uh to um to stimulate the economy and the fed has certainly indicated that they are going to stay uh

Neutral to extremely uh um active on the liquidity side until at least 2022 the other central banks are following suit so there's

Very little in my mind that's getting in the way of the precious metals market except one caveat and that's been a caveat that i've been holding for about the past month if the equity market takes it hard

And really starts to sell off and i'm not talking you know a thousand point correction but starts to really take take it on the chin because the economic data doesn't support it

There may be selling in the metals just to raise cash so that is one of the things i'd be watching out for but the overall macro picture for the precious metals uh

Remains as bullish as it did two days ago can you talk about the physical market and also talk about the supply of uh say gold as well as silver coins how's it looking

Right now when you last talked to kitko you said that there was a bit of tightness with silver yeah uh about a month ago i came out and i said it looked like the market was normalizing and it was and supplies were

Coming albeit and not to the same extent pre-coveted but supplies were starting to come on the market from uh from the royal canadian mint and the u.s mint and even the british rome it was moving

Product into north america and you know getting silver maple leafs and silver eagles uh was relatively easy and then we had this manic spurt and silver it went from uh i think my last comment

Silver was at 19 and i expected it to go to 24 and it ran all the way up to 30. and that spike in demand uh ironically there wasn't a lot of physical selling of silver in that

Up move uh create created a situation we are now at a uh a situation that was it looks similar to march premiums on silver product in in in coin category

And or bar category are now similar to where they were in march april uh eagle silver eagle premiums are i've seen them north of nine ten dollars maple leaf

Uh silver maple leafs are are north of six to seven dollars a hundred ounce silver bars are extremely difficult to get and if you can they're at about a four dollar premium so the uh the physical inventory that's

In the market right now is almost non-existent and uh the premiums have gone through the roof uh again there is no indication that there is short-term relief coming

Here uh the canadian mints uh is looking to to shut down at least part of its production in the summer because of holidays then they have a major inventory shut down in early september

So that's going to impact production so as long as silver stays in this range and you know doesn't go south of 20 i i think that the demand from the retail investor on physical silver is going to keep this market tight

And keep premiums elevated uh and i don't see any relief on that until maybe the fall uh some of the precious metal bulls i've been talking to have been pointing to a lost man within this

Group and then that would be platinum uh you've had seven year highs for uh silver within the last handful of weeks and obviously all-time highs with gold you're still looking though at platinum being in the low 900s when it traded

North of 2000 when we got our peak back in 2011. is there anything that looks good around platinum right now do you see it gaining momentum and then joining the rest of the precious metals

Well about a month a couple of months back when platinum was trading again if my memory serves me right in the sort of low 700s our target on it in the short term notwithstanding what's

Just happened with gold and silver was a thousand dollars we hit that target about a week ago and you know platinum's fundamentals from from an industrial perspective have been

Uh greatly impacted by uh you know the the switch to palladium uh you know palladium pre uh at around march april dropped all the way down to 1600 it's trading back up at twenty

Three hundred dollars rhodium dropped all the way down to four thousand dollars an ounce maybe slightly below that it's uh today the offer uh in europe was eleven thousand dollars on

Rhodium so uh you know rhodium is almost at pre-covet highs uh again uh but platinum because of its industrial usage and uh less industrial usage in the car uh in the catalytic converter market

Uh has just not caught the same type of uh of bid that you see in gold and silver i think platinum in the low 900s is inexpensive and if gold now can consolidate and

Again rise above two thousand dollars in silver again starts moving higher uh i think platinum at twelve hundred dollars would be a uh a viable target within the next uh

Six weeks uh will we see platinum ever surpassing gold uh not likely unless there is a major supply uh issue with platinum and you know supplies get totally disrupted i i think

Uh investors are going to have to be satisfied with the fact that platinum is more than likely going to trade a discount the gold for the foreseeable years peter thanks for speaking with kitko

Thank you michael pleasure to be here you

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