Are Silver & Platinum Gaining Momentum?

by | 22. Jan 2024 - 13:36 | Spotlight on Precious Metals

How weak is industrial demand really? If precious metals are anything to go by at the start of the week, very weak. Palladium, platinum, and silver have all started with clearly negative signs. Meanwhile, gold is holding up well above the 2000 mark. Indeed, the optimism of an early interest rate cut has been priced out in the last few days, thus significantly dampening the upward trend that had already begun. In our view, however, the only change in this regard is the delay of the cuts. We see good opportunities to build up initial positions at this level, particularly in silver and platinum. Silver appears to be trading in the clearly oversold segment.

Last week, the World Platinum Investment Council (WPIC) published new forecasts for platinum up to 2028. The substitution of palladium is continuing. The forecast shows a significantly reduced deficit in 2027, but significant deficits of at least 500k ounces (over 15 tons) will dominate the market from 2025 onwards. Primary production is currently in a negative spiral about all-in-sustaining cash costs (AISC), as around 25% of total mine production is now produced with negative margins. The market remains highly interesting for medium-term commodity enthusiasts at the current price level.

Rhodium will likely end its short-term rally and follow in the footsteps of its (auto) fellow sufferers. After slight cash-driven selling at the end of the year, iridium has regained strength and currently appears to be the most stable and still the most valuable of all precious metals.

“PGM – Spotlight on Precious Metals” is a commodity column focused on gold and precious metals but mainly dedicated to the widely discussed yet rarely analyzed platinum group metals (PGM). Focused on the industrial applications of the metals as well as their potential as tangible assets, the abbreviation PGM has a twofold significance: With Philipp Götzl-Mamba, we could win an experienced precious metal trader operating at the cutting edge of the industry, sharing his knowledge with us.

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