(Kitco News) – Gold saw some relief last week on safe-haven demand, hitting a two-month high, while the other precious metals suffered; however, Mitsubishi says the outlook doesn’t look too positive for the precious metals.

“An unusual divergence between gold and the PGMs took place last week as bullion was buoyed by risk-averse mentality as global equities, led by China, plunged lower and geopolitical concerns…came to the fore. Platinum and palladium reverted to their pro-cyclical industrial roles while gold and silver both benefitted from safe-haven buying,” said Jonathan Butler, precious-metals strategist for the company, in a research note Monday afternoon.

After having posted gains and breaching the $1,100 level, gold futures started the week on a negative tone. February Comex gold futures were last quoted down almost 1% at $1,086 an ounce.

According to Butler, the metals should move lower over the short term for both fundamental and technical reasons, except for platinum.

“Current [platinum] prices are technically in oversold levels on a 14-day Relative Strength Index basis, implying a near-term bounce higher is possible, perhaps back towards the 50-day moving average at $871,” Butler added.

April platinum futures were last quoted down $3.80 at $842.50 an ounce. If Butler’s outlook is correct, he would expect platinum prices to bounce by over 3%.

However, commenting on gold, Butler said that although the metal managed to post its best weekly run since August, profit taking could drag prices lower in the short term. Likewise, Butler expects palladium prices to suffer as well.

“Palladium suffered its worst week since mid-November, shedding almost $70. This put palladium below the 50% retracement of the 2008 low to 2014 high and implies further downside from here,” he said.

For silver, Butler noted that the metal lost ground against gold, trading around a five-month low against the yellow metal. He added that he expects continued pressure for silver as investor sentiment “appears to be negative at present,” with the possible exception of the coin market.

“There was net selling in silver exchange-traded funds (to the tune of around 2 Moz) while Comex gross short futures advanced for a second week, by over 6 Moz (2%) offsetting a very modest increase in gross longs,” he noted.

March silver futures were last quoted down 0.62% at $13.78 an ounce.

By Sarah Benali of Kitco News; sbenali@kitco.com
Follow me on Twitter @SdBenali