Platinum the dark horse in Precious Metals

Many investors prefer platinum over gold as an investment as it is cheapest in comparison to bullion and palladium. Investors who held platinum last year were not switching to palladium but as the metal tumbled in the last year by over 14 per cent, investors moved to gold funds due to growing prospects in the yellow metal.  Some believe the trend can reverse anytime on slight buying opportunities where one of the largest bond managers Pimco claims the metal is cheap and a few percent of the asset can be moved from gold ETFs to platinum as it is widely positive, in terms of, supply-demand balances and price. In general, 3 per cent of the metal is held as an investment, in comparison to, yellow or white metals, which constitute higher share.

Investors also claim the current scenario is suitable for silver, which has better growth rate than other metals. The white metal ratio with gold was 1:32 times in 2011, and now it is 1:83. In comparison to other metals in the category, the dark metal was weakest in 2018 due to reduced climate concerns and low inclination towards the use of metal for carbon control in diesel powered automobiles. Even the Federal Reserve supported yellow and white metal for investment, whereas, palladium grew over the increase in the use of gasoline vehicles. 

Forecasts and Supplies 

Spot platinum was at $799 in the second week trade in January 2019 and gold was at $1,289.39 an ounce. There are forecasts over growth in yellow metals, mostly where the markets are expected to face turmoil over economic slowdown, Brexit and trade wars. The yellow metal as a safe haven has been predicted to gain beyond $1400 an ounce in the year. 

In the case of black metal, the market is in surplus but consumption has been increasing at the rate of 2 per cent, mainly, due to increased use in industrial processes and investment. There are other factors supporting such as weak dollar and low treasury yields. Chinese jewelry demand is expected to bottom out this year; hence, more demand in jewelry sector can be seen.

Most such metals are used as auto catalyst. Even silver, which is an undervalued metal, has many industrial uses. It is used in PVs but the investments in solar panels reduced in the last year in many countries. 

Investors are expecting the price of black metal to grow in 2019 but the supply is in excess, despite interest, buyers are hesitant to invest due to oversupply concerns. The World Platinum Investment Council claims the supply can ease in 2019 that will reduce the impact on price. The demand can grow 2 per cent, mostly due to higher industrial consumption, which can support gains in price. Investors are also looking for options in mining stocks of South African Platreef platinum group metals projects. The mines hold over eight million ounces of palladium and over 1 million gold. 

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