Blogs & Comment

The platinum and palladium bounce…

A few precious metals forecasts were revealed today by GFMS Limited, a precious metals consultancy based in the U.K. Platinum is expected to trade between US$900 and $1375 per ounce this year, while palladium should trade between $170 and $325, according to GFMS Platinum and Palladium Survey 2009. At the time of this writing, platinum was trading at $1,185 and palladium was trading at $235.
While the survey offered a look ahead, it also offered a retrospective. Platinums gross surplus more than tripled in 2008 to more than 280,000 oz last year, thanks in large part to lower vehicle production. Demand for platinum jewellery, however, has risen since the middle of last year. Production dropped 7% last year because of power crisis in the worlds largest producer of platinum, South Africa.
Meanwhile, palladium faced a gross deficit of almost 650,000 oz in 2008. The gross deficit was double that in the previous year. GFMS attributed the deficit primarily to the drop in mine supply in both South Africa and Russia, the main producers of the metal.
Whats GFMS final word on the topic? Overall, the consultants anticipate investors will gravitate towards precious metals to preserve their wealth in an environment of a weak stock market and long-term inflation concerns. But demand for both platinum and palladium will be muted because of the decline from the auto sector.