“Platinum Market Like a Ticking Time Bomb”: Precious Metals MMI Dips for September
Trevor Raymond, director of research at the World Platinum Investment Council, says that the platinum market is like a ticking time bomb.
The global platinum market has been in deficit for five years, with mine strikes and shortfalls leading the way into a supply-side headache for the industry. Demand appears robust, according to WPIC’s data and quarterly reports, led by developments on the heels of Volkswagen’s diesel scandal, China and India’s jewelry desires, and a potentially interesting knock-on effect from rising oil prices.
The investment community will likely be the prime driver of PGM price movements in the future, but whether it’s a chicken-and-egg situation—rising prices spurring investment activity, or vice versa—remains to be seen.
According to a recent release by Sprott Asset Management, “August marked the fourth successive month that gold prices rose in contrast to the dollar—something that has not occurred since metal peaked five years ago amidst the global financial crisis.”
“Demand is now at a 4-year high with metal displaying one of its best yearly performances since the 1970s. Due to the rise of negative interest rates and a more volatile market, gold is looking like a safe bet for many investors,” right alongside platinum, it would seem, with a secondary positive aspect of the latter being its industrial element.
“As a result of sluggish global economic growth, central banks are pushing interest rates into negative territory, which is positive for gold,” said Senior Portfolio Manager Paul Wong. “We are likely in the early stages of the current gold bull market, driven by a global push to a negative interest rate policy, currency volatility and a high level of cross-asset class correlation.”