Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Platinum Demand Hurt By Economic Fears

ByGoldMoney News Desk
Published 05/23/2012, 01:54 AM
Updated 05/14/2017, 06:45 AM

At the beginning of this year investors were optimistic about platinum price increases, but have suffered some disappointment lately. August of 2011 saw the white metal trading at over $1,900 per troy ounce, but it has since dropped below $1,500. Many analysts were expecting strong automobile demand from China and other emerging countries to help push the platinum price higher – the automobile industry absorbs about a 60% of yearly platinum supply for use in the construction of catalyst systems. The jewellery industry is the second largest end user.

But in Q1 half of all European Union members slipped back into recession, while growth in China and America is also slowing. China's booming automobile market contributed greatly to platinum and palladium's recoveries following their price crashes in 2008. Slackening economic growth in Brazil has also emphasised that for the moment at least, emerging markets remain highly sensitive to economic events in the developed world.

Johnson Matthey expects a 400,000+ ounce supply surplus in the platinum market this year (similar to last year). During 2011 platinum investment demand dropped by 460,000 ounces (approximately 30%) – largely as a result of sales of platinum exchange-traded fund shares during Q4.

However, during Q1 of 2012 investment demand recovered by 63,000 troy ounces, fanning hopes that the platinum price could soon start to make up ground lost since last summer, as investors start to appreciate that platinum – in common with all other precious metals – is a tangible asset that offers security during times of economic and political uncertainty.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.