Conditions surrounding platinum have been changing quickly, as extreme pressure is on the sector because the current price literally can't support the industry. Either the price of platinum will have to rise or production and supply will be cut back on. It's as simple a story as that, although with numerous details which support the narrative.
As for platinum supply, South Africa, Zimbabwe and Russia account for 90 percent of all platinum produced in the world, with South Africa accounting for about 75 percent to 80 percent of it.
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Showing posts with label Platinum Prices. Show all posts
Showing posts with label Platinum Prices. Show all posts
Saturday, June 1, 2013
Friday, October 12, 2012
Copper, Zinc, Nickel, Tin all Drop
Many commodities took a big hit Friday, as copper, zinc, nickel, tin, gold, silver, platinum and palladium were all trending down, with copper, platinum and palladium taking the biggest hits as measured by percentages, and with platinum and palladium, also falling by the most in U.S. dollars.
Copper has been the major story this month regarding commodities, as it plunged to its lowest levels this week in three months, with falling demand for scrap-metal weighed on the base metal. Most of that is from the slowing demand in China, which has been working on slowing down its heated up economy.
For the last three months, discounts for scrap copper plunged by 25 percent. This is a dramatic turn around from September where copper prices got a boost from the implementation of further stimulus in the United States and Europe.
One of the best leading indicators for copper prices is scrap, and demand has been weakening for the last quarter, even with the bump in copper prices for September.
Copper futures fell to about $3.70 a pound on the Comex in New York for December delivery, at just before 1:30 PM EDT. For the week it is down two percent. Copper futures are trading about 40 cents above No. 2 scrap. That's ten cents above the 30 cents discount it traded at against copper in the 3rd quarter.
Credit Suisse (CS) estimates copper production in 2013 to be at 293,000 metric tons, in contrast to the 102,000 ton shortfall in 2012.
On the London Metal Exchange, copper for December delivery was down to $8,130 a ton ($3.69 a pound), a decline of 1.3 percent.
Thursday, October 4, 2012
Euro Climbs to Two-Week High Against Dollar
The euro soared to a two-week high against the U.S. dollar Thursday, as that and other factors accounted for a number of commodities also climbing.
Concerning the euro, European Central Bank President Mario Draghi reaffirmed his commitment to maintain and preserve the euro, as well as the monetary system of the area.
That announcement was what pushed the euro up against the dollar, which helped boost many other commodities as well.
Not only were commodities helped though, as the news from the ECB also helped Wall Street equities to soar as well.
Precious metals gold and silver were unsurprisingly higher, as was much of energy, although that was aided by Turkish strikes on Syria, which generated supply concerns, along with a fire at the largest refinery in the U.S, which is run by Exxon Mobil (XOM), along with another refinery fire in Russia.
In agriculture, corn, wheat and soybeans were all up on the day, after hitting a three-month low the day before. Sugar was also up.
Other metals rising included platinum and palladium in the U.S.
Monday, August 23, 2010
JPMorgan (NYSE:JPM) Sees Platinum, Palladium Rising
Prices for platinum and palladium are poised to rise, according to JPMorgan (NYSE:JPM), citing the implementation of new mining rules in South Africa.
The new rules transfer some rights at mines to black South Africans. With the son of the South African president being connected to the largest shareholder in Kumba Iron Ore LTD., which had some of the rights of the mine transferred to them, it undermines the assertion it's for the purpose of redressing what is being called "inequalities," related to apartheid years ago.
Consequently, the uncertainty related to these political moves has caused potential investors to hold back until more clarity about the mining laws of the country is made, and ultimately laws put in place that can also be counted on by investors to make intelligent decisions upon.
Even worse, is the upcoming congress next month in South Africa, where the ruling party is beginning talks on nationalizing the large mine next month.
Already Anglo American Plc and Lonmin Plc have complained about the government taking away their mining rights.
This uncertainty is sure to drive up platinum and palladium prices in the near future,
Mines Minister Susan Shabangu said the nation will work on clarifying all the uncertainties surrounding the changes, especially investor concerns over the awarding of rights, which could change the entire picture as far as return of investment if leaders arbitrarily award others the rights in relationship to internal political considerations.
The new rules transfer some rights at mines to black South Africans. With the son of the South African president being connected to the largest shareholder in Kumba Iron Ore LTD., which had some of the rights of the mine transferred to them, it undermines the assertion it's for the purpose of redressing what is being called "inequalities," related to apartheid years ago.
Consequently, the uncertainty related to these political moves has caused potential investors to hold back until more clarity about the mining laws of the country is made, and ultimately laws put in place that can also be counted on by investors to make intelligent decisions upon.
Even worse, is the upcoming congress next month in South Africa, where the ruling party is beginning talks on nationalizing the large mine next month.
Already Anglo American Plc and Lonmin Plc have complained about the government taking away their mining rights.
This uncertainty is sure to drive up platinum and palladium prices in the near future,
Mines Minister Susan Shabangu said the nation will work on clarifying all the uncertainties surrounding the changes, especially investor concerns over the awarding of rights, which could change the entire picture as far as return of investment if leaders arbitrarily award others the rights in relationship to internal political considerations.
Monday, August 16, 2010
Freeport (NYSE:FCX) Up as Goldman (NYSE:GS) Reiterates "Overweight" on Commodities
Shares of Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) are up today as Goldman Sachs (NYSE:GS) reiterated its "Overweight" rating on commodities.
Freeport rose to $71.08, gaining $1.01, or 1.44 percent as of 2:28 PM EDT.
The dollar also fell today, helping the price of copper push up. Orders which will draw metal from stockpiles also rose to a two-month high.
Dropping almost 1 percent today was the U.S. Dollar Index, which tracks a basket of six currencies against the strength of the greenback.
Besides copper, other metals Goldman Sachs likes are gold, oil, platinum and zinc.
Freeport rose to $71.08, gaining $1.01, or 1.44 percent as of 2:28 PM EDT.
The dollar also fell today, helping the price of copper push up. Orders which will draw metal from stockpiles also rose to a two-month high.
Dropping almost 1 percent today was the U.S. Dollar Index, which tracks a basket of six currencies against the strength of the greenback.
Besides copper, other metals Goldman Sachs likes are gold, oil, platinum and zinc.
Thursday, April 15, 2010
China Platinum Demand Driving Prices Up
Gold is of course grabbing the majority of the headlines lately, and rightly so, but that hasn't kept some of the other precious metals performing strongly so far in 2010, and that includes platinum and palladium, which have outperformed gold by a wide margin so far this year.
Platinum has ralled by 17 percent and palladium has performed even better at 25 percent gains in 2010. On the other hand, gold has been struggling at gains of about five percent.
With the possibility of increased demand in China for platinum and palladium for use in catalytic converters, and what seems to be a growing and new demand in the jewelry sector, there are expectations there will be a shortage of platinum in 2010, in contrast to a surplus last year on lower demand.
China has become the largest car market in the world now, which of course will be the primary driver of platinum and palladium prices, as it is with other raw materials it needs to grow its economy.
Some platinum and palladium companies have been performing strongly recently, as the market attempts to sort out whether or not the seeming growing demand for platinum and palladium is real and sustainable, which means it needs to be seen that China is continuing to grow, especially in the auto sector.
That news has been confirmed as far as pace of growth, now it'll need to be broken down more to find out the details.
Assuming the demand for platinum and palladium from China is real, and it does seem to be, that should continue to push prices up throughout 2010.
Platinum has ralled by 17 percent and palladium has performed even better at 25 percent gains in 2010. On the other hand, gold has been struggling at gains of about five percent.
With the possibility of increased demand in China for platinum and palladium for use in catalytic converters, and what seems to be a growing and new demand in the jewelry sector, there are expectations there will be a shortage of platinum in 2010, in contrast to a surplus last year on lower demand.
China has become the largest car market in the world now, which of course will be the primary driver of platinum and palladium prices, as it is with other raw materials it needs to grow its economy.
Some platinum and palladium companies have been performing strongly recently, as the market attempts to sort out whether or not the seeming growing demand for platinum and palladium is real and sustainable, which means it needs to be seen that China is continuing to grow, especially in the auto sector.
That news has been confirmed as far as pace of growth, now it'll need to be broken down more to find out the details.
Assuming the demand for platinum and palladium from China is real, and it does seem to be, that should continue to push prices up throughout 2010.
North American Palladium (AMEX:PAL) Surges on Reopening of Lac de Iles Palladium Mine
North American Palladium (AMEX:PAL) exploded by over 7 percent today on the news it is reopening its Lac de Iles palladium mine, the key mine of the company.
A secondary factor has also affected the overall palladium and platinum industry, as news China may be hungrier for the two metals over gold has investors looking at the possibility closely.
Going beyond the usual idea of use in catalytic converters, palladium and platinum are also being eyed by consumers for jewelry, as it seems some are abandoning gold for the latest fad, although we'll have to wait to see if that emerges as a longer term trend. Gold usually never goes out of favor in that regard, but rising prices could result in consumers turning to alternative metals, as shown by the much more price of palladium, even after going as high as $548.50 an ounce on Wednesday. Much of that is of course attributed to catalytic converters and anticipated increasing demand.
Either way, the reopening of the Lac de Iles palladium mine by North American Palladium will give them a big boost, and the additional demand from China for cars and jewelry should offer strong support for the share price of the company.
A secondary factor has also affected the overall palladium and platinum industry, as news China may be hungrier for the two metals over gold has investors looking at the possibility closely.
Going beyond the usual idea of use in catalytic converters, palladium and platinum are also being eyed by consumers for jewelry, as it seems some are abandoning gold for the latest fad, although we'll have to wait to see if that emerges as a longer term trend. Gold usually never goes out of favor in that regard, but rising prices could result in consumers turning to alternative metals, as shown by the much more price of palladium, even after going as high as $548.50 an ounce on Wednesday. Much of that is of course attributed to catalytic converters and anticipated increasing demand.
Either way, the reopening of the Lac de Iles palladium mine by North American Palladium will give them a big boost, and the additional demand from China for cars and jewelry should offer strong support for the share price of the company.
Friday, February 26, 2010
Commodities Rise on Falling Dollar
Commodity Prices Rising
The falling dollar gave commodities a boost today, as many raw materials rose as a result of the dollar-denominated factor.
Gold, silver, copper, platinum and palladium all enjoyed price increases with little resistance in a relatively light day of trading.
Another commodity sector rising was energy, where oil, natural gas and gasoline all spiked.
Also joining the other commodity sectors in rising in price were the grains, where corn, soybeans and wheat all moved upwards.
What this shows me is how important the U.S. dollar is to the inflationary pressure we continue to face. While that's nothing new, it does show how just a little weakness in the dollar can drive commodity prices upwards.
It also shows me how vulnerable we are to inflation, and how quickly things can change in relationship to that.
Commodity Prices Rising
Financial Advisor
The falling dollar gave commodities a boost today, as many raw materials rose as a result of the dollar-denominated factor.
Gold, silver, copper, platinum and palladium all enjoyed price increases with little resistance in a relatively light day of trading.
Another commodity sector rising was energy, where oil, natural gas and gasoline all spiked.
Also joining the other commodity sectors in rising in price were the grains, where corn, soybeans and wheat all moved upwards.
What this shows me is how important the U.S. dollar is to the inflationary pressure we continue to face. While that's nothing new, it does show how just a little weakness in the dollar can drive commodity prices upwards.
It also shows me how vulnerable we are to inflation, and how quickly things can change in relationship to that.
Commodity Prices Rising
Financial Advisor
Friday, February 6, 2009
Indians Moving from Gold Commodity to Platinum
Indians gravitate toward platinum as gold prices continue to surge
Now that gold prices and futures look like they're going to rise even more in 2009, platinum prices could enjoy the benefit of the trend of Indian women migrating to plantinum in order to meet the demand.
Indian gold jewelry demand can't keep up with the surge in world Gold Prices right now.
THE SKY-ROCKETING Gold Price for Indian jewelry buyers has shrunk the volume of gold imports into India, reports Rishabh Vora for Commodity Online.
Demand for jewelry was already sluggish in November and December, but it simply vanished in January. However, Gold Investment demand has gained momentum here just like everywhere else as the Gold Price shot up to new all time highs.
The increasing price of yellow metal continues to hurt companies engaged in the jewelry making and trading trade – companies like Gitanjali Gems Ltd and Rajesh Exports Ltd here in Mumbai.
On the contrary, the share price of both these companies has fallen by 85% and more over the last 12 months on expectations that rising Gold Prices would have an adverse impact on their business.
Now this week, Gitanjali Gems – a leader in jewelry exports from India – just reported a fall in its consolidated net profits by 42% in the company's Q3 results. The fall in the profits were the fallout of the contraction in the diamond and jewelry segments of the company during the period.
The company witnessed a decline of 17% in its revenue from Indian operations and a 7.8% decline in its overseas operations during the quarter.
The outlook from here? According to Indian analysts, the current low gold-imports demand is mainly driven by people cashing in and selling their existing inventory or old jewelry. This has come even as Gold Investment demand has increased considerably.
Some Mumbai analysts believe that volatile investment demand driven by Gold ETFs could drive the Indian Gold Price up to a new high of 16000 Rupees per 10 grams in coming months.
Indian consumers turning to platinum jewellery 5th February 2009
Read more about the platinum group metals markets in Johnson Matthey's bi-annual reviews click here.
Demand for platinum jewellery is on the rise in India, according to a new report published today (5th February) by Reuters.
The country is famed for its love of buying gold jewellery - particularly for festivals and wedding seasons - but platinum has not been as closely tracked historically, with only a few companies importing bars.
However, a number of jewellers are now reporting a substantial rise in interest from consumers who are looking to purchase luxury pieces.
Sheetal Darji, a member of the sales team at Anmol Jewellers in Bandra, Mumbai, told the news provider: "Suddenly, the number of people coming and buying from my counter has increased.
"Earlier I used to handle one to two buyers daily, now the number has increased to four to five."
Those sentiments were echoed by Ishu Dattani, a partner at the company, who noted that sales have increased by between 20 and 25 per cent in the past six months alone.
Consumers such as Shweta Arora, a partner at an investment bank, are beginning to realise the value of platinum jewellery, whether it be for engagement rings, wedding bands or a present for a relative.
Contemplating purchasing a stunning platinum necklace, she told Reuters: "I wanted to buy a gift for my sister-in-law, who is a South Korean staying in the United States."
According to the news provider, Princeson Jose, Director of Princeson Jewellers, believes that demand will increase by a further ten per cent by next year.
India's local gold demand remained quiet on Wednesday as it traded above the psychological 14,000-rupees-mark in the midst of the wedding season, with scrap continuing to flow in the market, dealers and traders said.
"There is no much demand...there are no enquiries from jewellers as well," said a dealer with a state-run bank in Mumbai. "Volatility is keeping them away."
Traders said jewellers are unwilling to buy new stock due to the unsold stock lying with them in their warehouses.
"People are expecting prices to come down to $800-835 so that they can buy," added the dealer.
The benchmark April contract on the Multi Commodity Exchange (MCX) was 41 rupees higher at 14,030 rupees per 10 grams at 1:15 p.m., after hitting a high of 14,040 rupees earlier.
Gold is still available at a discount of 250-300 rupees compared with prices quoted by banks, signifying lack of demand.
Traders were also seen taking profits on the yellow metal, which they had bought at lower prices.
"Business is down by 80 pct," said Darshan Zaveri, director with Manubhai Zaveri Ornaments, an Ahmedabad-based bullion trader.
"Even we are selling gold at a discount (at the retail level)," said Zaveri, "but there are no buyers," he added.
MUMBAI: Lower prices has sparked demand for platinum in India, a country famed for high gold sales, and analysts and traders say, the demand is Investing in gold a safe bet
Gold emerges as safe option
Tips for good quality gold
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likely to rise further in the near term.
A more than 37 per cent fall in Indian prices tracked a slump in international spot markets, where the metal traded at $977.00 an ounce at 3:20 p.m., down 57.4 per cent from its all-time high of $2,290 an ounce struck on March 4, 2008. Platinum is not a closely tracked in India as there are few buyers. Some jewellers import bars to make jewellery, and don't always peg the daily price to international rates.
"I got to know through newspapers that prices have fallen drastically," Shweta Arora, a senior partner at an investment bank said, as she examined platinum jewellery in a suburban Mumbai shop. "I wanted to buy a gift for my sister-in-law, who is a South Korean staying in the United States," said Arora, eyeing a glittering necklace. A 10-gram platinum ring was priced around 22,000 rupees as against 35,000 rupees a year-ago, said Princeson Jose, director with Princeson Jewellers, which caters to South Indian markets.
"Suddenly, the number of people coming and buying from my counter has increased," said Sheetal Darji, a sales girl with Anmol Jewellers in Bandra, Mumbai. "Earlier I used to handle 1-2 buyers daily, now the number has increased to four to five." Ishu Dattani, a partner at Anmol Jewellers, said sales have gone up by 20-25 per cent as compared to six months back.
"Clients have accepted the price decline very cheerfully, and they are buying more," said Jitendra Vummidi, a partner at Chennai-based Vummidi Bangaru Jewellers, who stocked a lot of platinum jewellery, said over the phone. "We are anticipating further spurt in consumer interest."
PRICEY, SO PRIZED
Platinum demand is expected to pick up further, said Bharghav Vaidya, a bullion analyst in Mumbai, but "platinum would be only restricted to cities." The prices too will not remain at current, attractive levels, but this could expand the tiny market for the white metal in the gold crazy country. "If the awareness of the price fall is increased, than we might have a huge base of market for platinum," added Anmol's Dattani.
India is estimated to have consumed 932 kgs of the metal in the fiscal year 2008-09, while the country imported approximately 400 tonnes of gold in the calendar 2008, according to the Bombay Bullion Association. "There is a probability of a rebound in prices of platinum, with $1,020 a good resistance area," said Harish Galipelli, head of research with Karvy Comtrade in Hyderabad.
The economic slowdown too will play its part in stifling demand, but the overall demand would increase by 10 per cent next year, said Jose. "If the prices remain at par with gold, then the consumption of platinum will definitely go up."
Platinum investors can take heart at this recent development, as auto sales and auto manufacturing doesn't look like it'll rebound any time soon, and finding a significant market for platinum in an unsuspected place is a potential great boon for platinum prices in 2009.
Saturday, January 24, 2009
Commodities: Silver Price Going Up
Commodities are starting to resume their upward run, and silver and gold should lead the way.
Investors have been waiting for a breakout, and that time arrived on Friday, as gold and silver exploded in price, with silver surging by 57 cents or 5.1 percent to $11.932.
Silver is similar to platinum in that it is both an investment and industrial metal, making investors look at two sides of the equation in making decisions on whether to invest or not.
It rings true when those watching silver say there's probably little resistance to it moving up to $14 an ounce. Silver could very well be on the cusp of a second move within the commodity bull market in general, and silver bull market in particular.
This is all more than just a moment of fashion or blip, it's definitely the beginning of a new upward move, as silver trends higher in an ongoing rally. Support levels should continue to move upwards, with no short-term signs of a peak in this bull run.
Investors are taking this move to heart and are getting more bullish on silver as an investment as the U.S. dollar begins its inevitable decline, as massive U.S. debt continues to be incurred in response to endless government bailouts.
There haven't really been a series or chain of events that have handed this gift to investors, it's only been a matter of when - not if - silver and gold were going to start rising in price again.
Forced liquidation and deleveraging have been the only circumstances that have held the commodity bull market from rallying even more, and it looks like those are winding down, and money is available to flow back to commodities.
Companies looking for cash to cover debt had to unwillingly sell off their silver and gold assets - along with other commodities - in order to get cash to survive.
Speaking in terms of percentages, we could see silver prices outperform all metals in 2009, a real gift to weary commodities investors who have looked at the sector as having its charm wear off.
Whether the charm has left or not, this is a fine place to be in, and we'll cross the peak destination of the commodity road when we get there. For now, silver will be a tremendous investment for 2009, and the bull rally should continue for some time.
Investors have been waiting for a breakout, and that time arrived on Friday, as gold and silver exploded in price, with silver surging by 57 cents or 5.1 percent to $11.932.
Silver is similar to platinum in that it is both an investment and industrial metal, making investors look at two sides of the equation in making decisions on whether to invest or not.
It rings true when those watching silver say there's probably little resistance to it moving up to $14 an ounce. Silver could very well be on the cusp of a second move within the commodity bull market in general, and silver bull market in particular.
This is all more than just a moment of fashion or blip, it's definitely the beginning of a new upward move, as silver trends higher in an ongoing rally. Support levels should continue to move upwards, with no short-term signs of a peak in this bull run.
Investors are taking this move to heart and are getting more bullish on silver as an investment as the U.S. dollar begins its inevitable decline, as massive U.S. debt continues to be incurred in response to endless government bailouts.
There haven't really been a series or chain of events that have handed this gift to investors, it's only been a matter of when - not if - silver and gold were going to start rising in price again.
Forced liquidation and deleveraging have been the only circumstances that have held the commodity bull market from rallying even more, and it looks like those are winding down, and money is available to flow back to commodities.
Companies looking for cash to cover debt had to unwillingly sell off their silver and gold assets - along with other commodities - in order to get cash to survive.
Speaking in terms of percentages, we could see silver prices outperform all metals in 2009, a real gift to weary commodities investors who have looked at the sector as having its charm wear off.
Whether the charm has left or not, this is a fine place to be in, and we'll cross the peak destination of the commodity road when we get there. For now, silver will be a tremendous investment for 2009, and the bull rally should continue for some time.
Commodities | Platinum Prices 2009
Commodities and platinum prices enjoyed a rebound last week that could be a sign of what is ahead for us in 2009. Many of the metals, including platinum, enjoyed price increases as the U.S. dollar fluctuates, and confidence in the greenback continues to fall.
Many investors are looking at platinum as a potentially great investment for 2009, as the price ratio to gold makes many think platinum is ready for a strong upward move.
What this means is two different indicators are being looked at to determine where things will go over the short and long term for platinum.
The first indicator is the demand side of the equation for platinum, the obvious industry being the auto sector, which isn't looking too good at this time in spite of the government bailouts used to shore them up.
It isn't known whether demand for platinum will be the determining factor in the price rising, even though it is very low.
One smaller but significant factor in the ratio between gold and platinum, is the rarity issue. There is about three times as much gold as platinum in the world, and that could determine some of the pricing for platinum in 2009 in relationship to gold.
Another player in the field is the strength of the U.S. dollar, which will definitely be under downward pressure for some time ahead, including 2009. All of the money promised by the variety of government bailouts ensure inflation is just a short step away, as the Federal Reserve ramps up its printing presses.
The reason this will happen is Sovereign Wealth funds and other funds are starting to move away from the dollar, as it is increasingly being looked at as an inferior currency. Foreign governments are no longer thinking of it as a place of refuge, certainty and safety.
China is already experimenting with using its currency internally as the way to exchange goods in certain wealthier provinces.
So for the long term the greenback looks bad and gold and platinum are looking pretty good. Gold will advance this year for sure, and platinum, if it moves in lock step with it, could bring solid returns for investors, whether it's moved by demand or the ratio of it to gold.
If it begins to move in the way it has historically, platinum could surge to high prices in 2009, making it a potentially great investment.
There has been a temporary lull in the commodities bull market, but that will only be for a short season of time, as demand for natural resources inevitably starts again. Platinum will mirror that move, and gold will continue to be a haven for investors looking for a place their money can be safe, as well as grow.
We need to continually monitor platinum futures and prices, now, and in the next couple of years, as it has the potential to surprise on the upside, and long term platinum should have a lot of upward movement, as the global economy eventually rebounds and demand skyrockets. Platinum has a lot of potential going forward.
Many investors are looking at platinum as a potentially great investment for 2009, as the price ratio to gold makes many think platinum is ready for a strong upward move.
What this means is two different indicators are being looked at to determine where things will go over the short and long term for platinum.
The first indicator is the demand side of the equation for platinum, the obvious industry being the auto sector, which isn't looking too good at this time in spite of the government bailouts used to shore them up.
It isn't known whether demand for platinum will be the determining factor in the price rising, even though it is very low.
One smaller but significant factor in the ratio between gold and platinum, is the rarity issue. There is about three times as much gold as platinum in the world, and that could determine some of the pricing for platinum in 2009 in relationship to gold.
Another player in the field is the strength of the U.S. dollar, which will definitely be under downward pressure for some time ahead, including 2009. All of the money promised by the variety of government bailouts ensure inflation is just a short step away, as the Federal Reserve ramps up its printing presses.
The reason this will happen is Sovereign Wealth funds and other funds are starting to move away from the dollar, as it is increasingly being looked at as an inferior currency. Foreign governments are no longer thinking of it as a place of refuge, certainty and safety.
China is already experimenting with using its currency internally as the way to exchange goods in certain wealthier provinces.
So for the long term the greenback looks bad and gold and platinum are looking pretty good. Gold will advance this year for sure, and platinum, if it moves in lock step with it, could bring solid returns for investors, whether it's moved by demand or the ratio of it to gold.
If it begins to move in the way it has historically, platinum could surge to high prices in 2009, making it a potentially great investment.
There has been a temporary lull in the commodities bull market, but that will only be for a short season of time, as demand for natural resources inevitably starts again. Platinum will mirror that move, and gold will continue to be a haven for investors looking for a place their money can be safe, as well as grow.
We need to continually monitor platinum futures and prices, now, and in the next couple of years, as it has the potential to surprise on the upside, and long term platinum should have a lot of upward movement, as the global economy eventually rebounds and demand skyrockets. Platinum has a lot of potential going forward.
Friday, January 9, 2009
Platinum Prices and the Year Ahead
There are a couple of different takes on the importance of platinum as an investment over the next year.
Some think the downturn in the auto industry and the resultant decline in platinum demand will slow the pricing of the metal, while others look at the price relationship between platinum and gold, and think platinum will be the best performing metal in 2009.
Under normal conditions, it usually requires between 1.7 and 2.2 ounces of gold to buy an ounce of platinum. Today the two metals are very close in price, generating the idea it's at bargain levels.
On the demand side, today South African investment bank and asset manager Investec (INVP.L) cut its short- and long-term outlook for platinum, citing the uncertainty in the auto industry as the driving factor.
In a research note, Investec analyst Rebecca O'Dwyer said, "We see downside risk to the platinum price in the near-term, particularly if vehicle sales continue to decline in the first few months of 2009."
Revised numbers from the bank places platinum at $970 and ounce in 2009 and $1,350 an ounce in 2010. Original projections were $1,350 for 2009 and $1,675 an ounce for 2010.
Who's right? That will depend upon whether demand is the determining factor in why investors buy platinum. Metals should be an excellent investment in 2009, and the economic circumstances would do more to dictate why people invest in them, rather than demand.
What I mean by that is U.S. equities, bonds and treasuries aren't going to be the focus of investors, with the danger connected to the U.S. dollar and the misguided bailouts and increased government spending.
So metals should be one of the few promising safe and growth sectors going forward into 2009. That in itself could override the demand factor concerning platinum (assuming it does go down), and the price definitely could surge up as investors pour their money into metals, and specifically platinum.
Some think the downturn in the auto industry and the resultant decline in platinum demand will slow the pricing of the metal, while others look at the price relationship between platinum and gold, and think platinum will be the best performing metal in 2009.
Under normal conditions, it usually requires between 1.7 and 2.2 ounces of gold to buy an ounce of platinum. Today the two metals are very close in price, generating the idea it's at bargain levels.
On the demand side, today South African investment bank and asset manager Investec (INVP.L) cut its short- and long-term outlook for platinum, citing the uncertainty in the auto industry as the driving factor.
In a research note, Investec analyst Rebecca O'Dwyer said, "We see downside risk to the platinum price in the near-term, particularly if vehicle sales continue to decline in the first few months of 2009."
Revised numbers from the bank places platinum at $970 and ounce in 2009 and $1,350 an ounce in 2010. Original projections were $1,350 for 2009 and $1,675 an ounce for 2010.
Who's right? That will depend upon whether demand is the determining factor in why investors buy platinum. Metals should be an excellent investment in 2009, and the economic circumstances would do more to dictate why people invest in them, rather than demand.
What I mean by that is U.S. equities, bonds and treasuries aren't going to be the focus of investors, with the danger connected to the U.S. dollar and the misguided bailouts and increased government spending.
So metals should be one of the few promising safe and growth sectors going forward into 2009. That in itself could override the demand factor concerning platinum (assuming it does go down), and the price definitely could surge up as investors pour their money into metals, and specifically platinum.
Tuesday, August 5, 2008
Platinum, Crude Oil, Corn Drag Commodities Lower
Demand continues to be a big drag upon commodities, as slowing economic growth continues to hammer raw materials and agricultural products in a number of areas.
We talked about platinum and palladium last post, which is being directly impacted from the declining auto industry.
But cooler and wetter weather has also increased the outlook for corn, which has been plummeting since corn reached a record price of $7.30 a barrel on the CBOT Friday the 13th of 2008. Corn fell today to a four-month low of $5.3625 a bushel, a 3.5 percent drop.
With the World Bank predicting global growth for crude oil dropping from the 2007 levels of 3.7 percent to 2.7 percent this year, prices have been dropping, going as low as $188 a barrel.
Other commodities plunging have been rubber, which is now at a two-month low; palm oil; nickel, which fell to a two-year low ($17,450 a metric ton); and zinc, which is at its lowest since December 2005 ($1,730 a ton); and soybeans, which fell 3.4 percent to $12.51 a bushel.
Commodity-tracking indexes show investors took out $680 million out of commodities last week, a record sixth week in a row.
"I'm not saying the long-term upward trend for commodities is going to come down," Mark Mobius, who oversees about $40 billion in emerging-market equities at Templeton Asset Management Ltd. in Singapore, said in an interview. "But you're going to see this overreaction, or the higher prices that we've seen recently that are beyond the trend, come back down again."
We talked about platinum and palladium last post, which is being directly impacted from the declining auto industry.
But cooler and wetter weather has also increased the outlook for corn, which has been plummeting since corn reached a record price of $7.30 a barrel on the CBOT Friday the 13th of 2008. Corn fell today to a four-month low of $5.3625 a bushel, a 3.5 percent drop.
With the World Bank predicting global growth for crude oil dropping from the 2007 levels of 3.7 percent to 2.7 percent this year, prices have been dropping, going as low as $188 a barrel.
Other commodities plunging have been rubber, which is now at a two-month low; palm oil; nickel, which fell to a two-year low ($17,450 a metric ton); and zinc, which is at its lowest since December 2005 ($1,730 a ton); and soybeans, which fell 3.4 percent to $12.51 a bushel.
Commodity-tracking indexes show investors took out $680 million out of commodities last week, a record sixth week in a row.
"I'm not saying the long-term upward trend for commodities is going to come down," Mark Mobius, who oversees about $40 billion in emerging-market equities at Templeton Asset Management Ltd. in Singapore, said in an interview. "But you're going to see this overreaction, or the higher prices that we've seen recently that are beyond the trend, come back down again."
Friday, August 1, 2008
Platinum, Palladium Fall on Auto Demand Concerns
Platinum fell by almost 7 percent today, and palladium followed the same pattern, falling by 6 percent, as high fuel prices continue to hamper demand in the auto sector.
Spot platinum fell to $1,644.50/1,664.50 an ounce at 1507 GMT from $1,749.50/1,769.50. Spot palladium fell to $363.50/371.50 an ounce from $379.50/387.50 on Thursday. It dropped to a seven-month low during the day to $356.00.
"Everybody expects car demand to be very low and the higher oil price will dampen it further," said Commerzbank analyst Eugen Weinberg.
It didn't help to hear the news in the industry that all the major auto companies plunged in sales during July. Nissan (NSANY) was able to grow by 8.5 percent, but that was because the $10,000 incentive included to buy its Titan pickup truck.
Sunday, March 2, 2008
Commodity Prices Continue to Rise and Break Records
Some of the commodity records and surge in prices during the last week.
Oil: $103.05 a barrel - All time high
Gold: $976.32 an ounce on Friday - All time high
Silver: $19.95 an ounce - 27-year high
Platinum: $2,150 an ounce - down from last weeks' record $2,206 an ounce
Palladium: Reached a six-year high of $585.50
Tin: Went as high as $18,900 a ton for 3-month delivery - the highest since 1989
Gold is expected to go past $1,000 an ounce, based on demand. Supply for platinum is also facing supply problems, as the issues in South Africa concerning power in the mining industry continues. A mining strike and accidents have also cut into supply. Palladium has also been affected by similar issues.
Tin supply has also been tight, based on problems in Indonesia, and so the continual rising prices there.
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