This morning we saw the price of spot Gold trading either side of $1,300 dollars. Yesterday we witnessed the price of Gold making a new one month high during Asian trading hours.
Overnight the Dollar Index has been trading in a tight range keeping the price of gold from advancing.
The Platinum Market
The World Platinum Investment Council yesterday released its nineteenth Platinum Quarterly Report, the first independent, freely-available, quarterly analysis of the global platinum market. This report incorporates analysis of platinum supply and demand for the first quarter of 2019, and revisions to both the full year 2019 forecast and 2018 actual.
This report shows a significant increase in overall platinum demand in 2019, owing to strong investment demand that more than offsets softer demand in the automotive and jewelry segments. The increase in investment demand was driven by a surge in ETF holdings, which gained 690 k oz. in the first quarter of this year, the largest quarterly ETF gain ever.
Demand in quarter one significantly exceeded the strong mine supply, due to release of refined platinum from smelter pipeline stock built up in 2018.
The result is the largest quarterly deficit, of 550 k oz; since the WPIC
commenced publication in 2014.
Although Q1’19 automotive demand was down year-on-year, the rate of decline continues to reduce as independent evidence emerges of exceptionally low NOx emissions from new diesel cars and their importance to automakers (due to their low CO2 emissions) in avoiding heavy fines by meeting EU CO2 emissions targets.
Quarterly jewelry demand fell further year-on-year due to a continued decline in Chinese demand, mitigated by a rise in all other regions. Q1’19 industrial demand was down slightly compared to Q1’18 as growth in demand for platinum in chemical catalysts was offset by declines in the glass manufacturing and other industrial demand segments.
Total global demand for platinum is expected to increase by 8% in 2019 on the back of a strong increase in investment demand. Supply is expected to rise by 4% this year. However, potential power disruptions and industrial action represent risks that could materially reduce South African mining supply during the year.
With demand projected to increase more than supply, the annual 2019mmarket balance will narrow sharply to a surplus of 375 k oz. from the previously
forecast surplus of 680 k oz.
Paul Wilson, chief executive officer of WPIC commented: “Today’s report shows significant investment demand growth – an indication that platinum demand growth potential is finally outweighing long standing negative sentiment. The market may have previously underestimated the significant positive impact on platinum demand likely as more platinum is used in emissions control in gasoline cars and the prospect of more clean new diesels on the road.
“The marked turnaround by investors, that has been anticipated for several years yet failed to materialize. We believe this turnaround follows the combination of several demand growth signals, downside supply risk and rising price.
“The opportunity for the global platinum market to grow remains undiminished. I have been personally encouraged by the number of leading global players keen to partner with us to deliver further platinum investment growth, particularly in the US and China.”
Thanks to the World Platinum Investment Council for this report.