Tension on the platinum market: scarcity, demand for jewellery and investment inflows are driving up the price. TRADIUM provides an insight into the background.
The price of platinum has risen to a 10-year high in the past week. In early trading on Thursday, 19 June, the precious metal was quoted at just under USD 1,350 or EUR 1,150 per ounce. At the beginning of June, TRADIUM had already reported a first price jump for platinum reported, the trend is now continuing.
The platinum market is currently in a deficit. Demand is outstripping supply. The World Platinum Investment Council attributes this to falling investment in mining, among other things, as the prices for platinum group metals were comparatively low last year. The structural deficit is likely to continue until 2029, especially as demand may grow more strongly than previously forecast - driven primarily by investment purchases in China. Rising demand from the jewellery industry is also playing an important role.
Philipp Götzl-Mamba, Senior Manager Precious Metals at TRADIUM, assesses the situation on the market as follows: "We are currently seeing an exceptionally tense situation on the platinum market: short-term lending rates of almost 30 per cent indicate an acute liquidity bottleneck. Lower primary production and increased interest from the jewellery industry due to the discount to gold are keeping the physical platinum market in a clear deficit. At the moment, buying platinum seems more attractive than financing it. This momentum has literally catapulted the price upwards over the past four weeks. As long as the situation on the financing market remains so tense and the inflows from the secondary market continue to be delayed, the price could continue to rise to the region of 1400 $/oz."
Further analyses of developments on the commodity markets are provided by "Market insight" - the TRADIUM blog.
