Money managers have started pouring into platinum partly because the hard asset is seen as a good store of value in face of potentially rising inflation pressures, the Wall Street Journal reports.
After the run in gold prices last year, some have turned to platinum as a cheaper alternative. Comex gold futures were hovering around $1,818.9 per ounce on Friday, while the platinum spot price was at $1,251.5 per ounce.
“It’s a well-kicked dog that’s getting up,” R. Michael Jones, chief executive of Platinum Group Metals Ltd., told the WSJ.
Platinum initially gained momentum on the improving industrial consumption of the precious metal, notably in automobile catalytic converters that limit harmful greenhouse gases from exhaust fumes. The metal is now riding the broader market rally as investors chase after rising markets on expectations of higher returns.
Good fortune bolsters PGMs in 2020
By Dineo Faku
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JOHANNESBURG - GOOD fortune smiled on mining companies as the gold price jumped sharply this year and platinum group metals (PGMs), particularly palladium and rhodium, strengthened significantly since the second half of last year.
Cash flow surged and profits soared as the bullion price broke several records due to the Covid-19 pandemic, spooking the markets and investors dumping risky assets for gold which is considered a haven asset during times of uncertainty.
In April, the gold price reached $1 720 (about R25 000) an ounce, bringing it to R1 million a kilogram. It smashed $2 000 an ounce in August.
15 march 2021
14 december 2020 In Q3 this year, platinum, along with other precious and non-ferrous metals, recovered rapidly from the collapse caused by the COVID-19 pandemic. The demand for the metal outstripped the supply volumes suffered from a series of failures at the Anglo American Platinum facilities. The growth was driven by a general recovery in the economy due to easing the coronavirus restrictions and giving monetary incentives. The structural deficit in the platinum market could result in new record prices, but the quotation dynamics is inferior not only to palladium, gold and silver, but also to copper and aluminum. One of the main reasons is the continuing decline in the production of diesel-powered vehicles with platinum as the main metal for catalytic converters.