At the end of last week, iridium replaced rhodium as the most expensive precious metal. Rhodium still could not stop the rapid sell-off and is in free fall. Overall, there was a strong sell-off of individual platinum metals at the end of the half-year. Iridium, on the other hand, is holding steady at the current level and this now gives the metal the price pole position. The selling pressure is certainly a combination of economic weakness, technical indications, and cash generation at the end of the half-year. Because platinum and palladium were also affected by this selling wave. In fact, we still consider platinum to be a “bargain” at this level – especially compared to gold (see long-term chart below). While gold has a primary production of over 3,500 T, platinum has not even 200 T. The price difference is immense: the gold/platinum – ratio is over 2.10. The last price parity was in 2015.
Another word on silver, because the demand for silver in the future is also likely to be driven by photovoltaics, reports the news agency Bloomberg on Monday. The industry is betting on more efficient solar cells, which have a higher demand for silver, it said. An expansion of mine production is not in sight. Hence, the silver deficit could increase. Furthermore, it should be noted that currently one of the largest European silver producers in Scandinavia is struggling with a major failure of a smelter because of a fire, the premiums for industrially traded granules doubled overnight. This shows once again that the entire physical precious metals market is a fragile structure of supply and demand situation.
Source: Thomson Reuters Eikon
“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. Financial expert Jens Weidenbach regularly compliments the column with an overview of the currency and capital markets, which have an influence on commodity prices that should not be underestimated.