A couple of weeks ago, we advocated investors to stop any build-up in PGM positions as the platinum metals group appeared to still lack the right signals for a buy, despite posting their first positive month in October after five months in red.
Just a fortnight later, platinum, the front-runner in that group, has become a prime candidate for precious metal investors looking for a new long candidate to join gold and silver, which have been rallying intensely on the back of the inflation-fueled rally.
All charts courtesy of skcharting.com
The surge in prices of platinum, which serves primarily as an emissions purifier for diesel-powered engines, came even after analysts and traders slashed their price forecasts for PGMs in a Reuters poll published on Oct. 28, citing a global chip shortage that forced automakers to cut production of most vehicles.
Auto makers account for some 40% of platinum demand as the metal is embedded in exhaust systems to neutralize harmful emissions. Palladium, meanwhile, is a purifying component for gasoline-powered cars.
The chip shortage had pulled the spot price of platinum from a seven-year high of $1,236.44 an ounce in February to as low as $893.00 by mid-September, while spot palladium dropped from an all-time peak of nearly $3,015 an ounce in April to as far as $1,841.93.
But within just a week of the gold-charged precious metals rally, platinum had broken out as well on pure technical-chart strength, and was on track Friday to a weekly gain of 5%?its biggest in six weeks.
Fundamentally, PGM prices could continue rising if car output recovers, having been dented by broken supply chains and global materials shortages.
More here: https://www.investing.com/analysis/platinum-turns-to-a-buy-in-goldled-inflation-rally-200608174
Just a fortnight later, platinum, the front-runner in that group, has become a prime candidate for precious metal investors looking for a new long candidate to join gold and silver, which have been rallying intensely on the back of the inflation-fueled rally.
All charts courtesy of skcharting.com
The surge in prices of platinum, which serves primarily as an emissions purifier for diesel-powered engines, came even after analysts and traders slashed their price forecasts for PGMs in a Reuters poll published on Oct. 28, citing a global chip shortage that forced automakers to cut production of most vehicles.
Auto makers account for some 40% of platinum demand as the metal is embedded in exhaust systems to neutralize harmful emissions. Palladium, meanwhile, is a purifying component for gasoline-powered cars.
The chip shortage had pulled the spot price of platinum from a seven-year high of $1,236.44 an ounce in February to as low as $893.00 by mid-September, while spot palladium dropped from an all-time peak of nearly $3,015 an ounce in April to as far as $1,841.93.
But within just a week of the gold-charged precious metals rally, platinum had broken out as well on pure technical-chart strength, and was on track Friday to a weekly gain of 5%?its biggest in six weeks.
Fundamentally, PGM prices could continue rising if car output recovers, having been dented by broken supply chains and global materials shortages.
More here: https://www.investing.com/analysis/platinum-turns-to-a-buy-in-goldled-inflation-rally-200608174
