Platinum surged above $1,300 an ounce for the first time in more than six years on bets that a recovery in industrial demand and stricter emissions rules will tighten supply of the metal. Gold edged lower.
Tougher pollution regulations requiring vehicle makers to use more platinum in catalytic converters are supporting prices, said Margaret Yang, a strategist at DailyFX. Platinum has gained 21 per cent this year, narrowing the steep discount with sister-metal palladium, which was the star performer over the two previous years.
After years of surpluses, Covid-19 mine shutdowns in South Africa saw the platinum market deficit widen to 400,000 ounces in 2020, Johnson Matthey said. While the market could return to a surplus this year, disruptions at a key refinery in the country improved the immediate outlook for the metal.
Platinum futures rose as much as 4.4% to $1,314.40 an ounce. Spot platinum rose as much as 4% to $1,306.22 an ounce, the highest level since September 2014, and traded at $1,294.60 as of 1:20 p.m. in London.
The outlook for prices will partly depend on whether investment demand — from those expecting a catch-up to gold and palladium — remains supportive.
“Platinum got attention from financial investors,” said Kirill Chuyko, a strategist at BCS Global Markets. “It’s getting its momentum now due to speculative demand.”
Gold slipped as investors weighed the slowing pace of coronavirus infections, as well as immunization programs globally, and the impact on growth. U.S. markets are shut for Presidents’ Day, while exchanges in China, Hong Kong and Taiwan also are closed Monday.