Even though platinum prices dropped in mid-April to a 2 1/2-month low due to worries over global economic growth, the purchasing of physical metal in Asia combined with traders shopping bargains slowed down the losses.
The market’s favorable supply and demand factors are demonstrated by investors buying on dips.
“Spot platinum prices briefly traded above gold in March, and that’s something that hasn’t happened since last summer,” said Terry Hanlon, president of Dillon Gage. In August, platinum prices dropped below gold for the first time since late 2008, making gold the highest priced metal for jewelry manufacturing.
“Platinum remains sought after in the Chinese and Japanese jewelry markets,” Hanlon noted. Rising gold prices lead to a lower demand for the metal in the jewelry industry. It’s usage in the sector dropped 3 percent in 2011 according to the World Gold Council. Meanwhile, the use of platinum in jewelry rose 2 percent in 2011, with the increase mainly from the Far East according to Johnson Matthey Plc, a major platinum distributor. In Novmeber, Johnson Matthey predicted that continued higher prices for the yellow metal could help platinum gain market share in the global bridal sector.
For the complete press release that covers the impact on platinum of labor tensions in South African and industry demands, click here.