Precious metal

A grouping defined by rarity and by resistance to corrosion rather than by any single use. Gold sits at one end of the group, held overwhelmingly as a store of value, and silver sits between two roles, since a substantial share of its demand is industrial. Platinum and palladium sit further along again, precious by rarity yet consumed industrially in vehicle emissions equipment, which is why they can track car production rather than the monetary story the group is usually associated with.

What separates the group from other commodities is the size of the stock relative to annual production. Almost all the gold ever mined still exists, so a year's mine output is small against the quantity already held, and the price responds to whether existing holders want to hold more or less far more than to what came out of the ground. That is the opposite of the situation in an energy commodity, where production and consumption dominate.

The consequence for reading a chart is that the group's drivers are largely financial. Real interest rates, the dollar, and periods when participants reduce exposure to risk assets all move the metals held for value, while the industrially consumed members respond to manufacturing data as well. A contract for difference written on any of them references the price and delivers no metal.