Metals took a beating Tuesday as prices fell considerably in reaction to the uncertainty in Japan.
Toyota, Nissan and Honda, all have shuttered plants temporarily to help the country get back online and function normally. Japan is currently rationing power with rolling blackouts throughout the country to preserve energy. Rather than trying to operate a production line in this type of environment, the Japanese automakers have decided to cease operations until the power supply is back to normal. Suburu is still operational. This is the main driver that is pushing platinum and palladium down. Platinum could get a little more support as it is still required in diesel engines and military applications, where palladium may continue it’s decline due to the sole use of it in the automotive industry.
Gold and silver have also came down putting the yellow metal back under $1400 and the white metal back in the $34 range.
All in all, nothing has changed in regards to what has been driving precious metals to the recent highs, all underlying factors are still in place. The middle east and north african turmoil has not subsided. Though many are seeking safe haven in the US dollar, it seems they really are unsure of what to do.
This is a buying opportunity for gold and silver, and given lower prices for platinum and palladium, it may be time to set up a basket of precious metals for yourself.
Japan has proven it’s resiliency time, and time again. We feel it will be no different this time around. As bad as it may be now, this may be a boost for the global economy as Japan rebuilds.