John Read Metals Quotations

Base and precious metals are considerably above what we consider to be fair value - based on fundamental supply and demand factors - but events of the past two years have demonstrated that investment and speculative flows are very capable of lifting prices well beyond fundamental fair value.

Gold and the other precious metals appear to have found support after the recent sell-off, however, we believe it is too soon to turn bullish on gold specifically.

We believe that new-year allocations towards commodities will keep platinum and palladium firm in the near term and see platinum at $1,100/oz and palladium at $300/oz over one month, although we suspect that profit taking will set in at some stage and see both metals lower to $1,050/oz and $270/oz in three months.

We believe that all precious metals are trading above fundamentally justified fair value, but the weight of investor, speculator and commodity-index buying has demonstrated that this does not stop metals trading ever-higher.