Investment demand and worries over reduced supply from top producer South Africa after temporary closures of mines due to lockdowns have been supporting the metal. While platinum has rebounded about 64 per cent from this year's lows after a massive sell-off in March, its discount to gold is still not far from a record with the silvery-white metal trading at half of bullion's value.
"Ultimately, those questioning whether there are green shoots for platinum would do well to keep its performance in perspective," said Steve Dunn, head of ETFs at Aberdeen Standard Investments."While gold continues to receive the lion's share of media attention, platinum has significantly outperformed since their lows" in March.
UBS Group is pinning its recent platinum forecast increase on its bullishness on gold and projected economic growth in the near term. The bank sees prices at US$975 an ounce at end-September and end-2020 compared with about US$930 currently. Yet, it cautioned that platinum's fundamentals remain the bleakest among precious metals.
Mr Shah believes platinum could flirt with the US$1,000 mark in the next 12 months as the biggest consumer, the auto industry, is recovering faster than many anticipated. Platinum is used in catalytic converters in diesel vehicles. "Near-limitless money printing by the Fed and global currency debasement are the prime drivers of the continuing rush to precious metals, including platinum," said Ryan Giannotto, director of research at GraniteShares."Unlike other monetary metals, however, platinum is 16 times more scarcely produced than gold and extraordinarily concentrated in supply," he said, adding that this should help support prices.
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