Is now the moment for platinum to shine? Predicted price of platinum

 

The first quarter of 2019 has witnessed a notable resilience in platinum prices, sparking curiosity about whether this upward trajectory will persist and merit a robust “buy” rating for platinum. Currently, experts remain optimistic, supported by the platinum price forecast for 2019, which suggests a 5% increase in global demand. Assessing Sentiment on EA Sentiment on EA (Electronic Arts) is as follows:

• Price: 120.14
• Sentiment: Bullish

Platinum Price Prognostication

Platinum, one of the world’s rarest and purest metals, boasts distinctive properties that render it highly prized across various economic sectors. Its unique catalytic and physical attributes make it a preferred choice in numerous industrial applications. The global platinum supply derives primarily from two sources: mining output and recycling. The latter comprises jewelry recycling and end-of-life auto catalysts. Over the past five years, approximately 75% of the annual platinum supply originated from primary mining. Platinum demand is diversifying and strengthening across four major sectors: automotive (41-43%), industrial (22%), jewelry (33%), and investments (ranging from 1-6%). According to the World Platinum Investment Council’s (WPIC) latest Platinum Quarterly report, 2019 forecasts indicate a substantial surge in overall platinum demand. This growth is underpinned by a rising investment appetite that offsets a slight dip in demand from the automotive, industrial, and jewelry sectors. Several factors fortify platinum’s investment segment in 2019:

1. South African Mining Disruption: Ongoing disruptions in South African mining operations may curtail platinum supply, as South Africa holds 95% of the world’s platinum reserves.
2. Diesel Market Recovery: A revival of the diesel market in Western Europe could bolster automotive sector demand for platinum. Historically, platinum performs well when the auto industry is robust.
3. Palladium Price Increase: A surge in palladium prices might encourage auto manufacturers to explore alternative technologies, potentially driving platinum’s growth as a palladium substitute in gasoline-powered vehicles.

Expert Predictions

Various financial institutions have made diverse platinum price predictions for 2019. Here is a snapshot:

• Deutsche Bank: $820
• Natixis: $875
• Commerzbank: $900
• Standard Chartered: $930
• ABN AMRO: $1,100
• TD Securities: $1,031

Historically, platinum reached its all-time high of $2,253 per ounce in March 2008 and hit a record low of $97.70 in January 1972. In 2017, the average platinum price stood at $948 per troy ounce, rising to an estimated $1,090 in 2018. As of July 16, 2019, the latest platinum commodity price hovered around $836.32.

Platinum Supply and Demand

Platinum prices remain influenced by the dynamics of supply and demand. In a fashion akin to 2018, experts anticipate a surplus of platinum in 2019. However, this surplus is expected to be smaller, with demand outstripping supply. Platinum Supply Despite ramped-up operations in South African mines, reduced platinum production in Russia and Zimbabwe led to a 1% decline in platinum supply in 2018. The World Platinum Investment Council (WPIC) suggests that operational disruptions persist in 2019. Nevertheless, increased output from North American and South African mines, alongside growth in platinum recycling, will boost platinum supply by 2% in 2019. The supply from platinum recycling will counterbalance the downturn in the jewelry industry. Platinum Demand Analysts project continued growth in platinum demand across various sectors throughout 2019. Platinum Investment Paul Wilson, CEO of WPIC, anticipates a resurgence in platinum investment this year. Investors may be drawn to platinum due to its relatively lower price compared to palladium and gold, despite a slight surplus in supply. Platinum Jewelry Following a 2% dip in 2018, the WPIC predicts a 1% uptick in platinum demand from the jewelry sector in 2019.

Platinum in Industry

Platinum occupies a robust position in the industrial sector, serving diverse applications. It is poised to gain further prominence among precious metals, given its anticipated increased usage. The automotive industry is contemplating a shift from palladium to platinum in catalytic converters for petroleum vehicles, owing to a significant price differential between the two metals. Additionally, petroleum refining and glass manufacturing are expected to drive demand for platinum, as refining capacity in the United States and China expands.

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