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Platinum Price Movements, Supply And Demand
Jeffrey shares expert insights on platinum price movements, supply and demand factors, and whether now is the right time to accumulate. Could we see a long-term breakout beyond the $1,000 mark? How will South African mining production and global economic shifts like tariffs shape the future of PGMs
Platinum’s Price Action and Potential Breakout
- Recent Trend Shift: Platinum has traded mostly between $800 and $1,000 per ounce since about 2015. However, it has broken above $1,000 a few times since 2020, most notably in January 2023.
- Investor Sentiment: This surge above $1,000 signals renewed investor excitement. Although platinum has struggled to sustain levels above $1,100, there’s a possibility of more upside if global economic and geopolitical factors align favorably.
Geopolitical Influences
- The Ukraine Conflict: Russia is a significant producer of platinum group metals (PGMs). Sanctions have partially restricted Russia’s supply flow, impacting production and export.
- A prolonged conflict could maintain tighter supply conditions and support higher prices.
- A ceasefire or settlement might loosen sanctions and allow more Russian metal to enter the market, potentially pushing prices lower in the short term.
- Tariffs and Economic Growth: While direct tariffs on platinum seem unlikely (due to the metal’s importance in automotive catalytic converters), there is concern that broader tariffs or economic restrictions can slow auto production and reduce platinum demand.
Automotive Demand & Future Outlook
- Automotive Sector: Platinum is crucial for catalytic converters, especially as automakers seek cost-effective alternatives to palladium. Economic slowdowns, however, can hamper auto sales—and by extension, platinum demand.
- South African Mine Production: A key long-term catalyst is the expected decline in South African platinum mine production. If demand from the automotive sector rebounds after a recession or slowdown, simultaneous supply constraints could drive platinum prices sharply higher.
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