Platinum is trading at a deficit of one million ounces in 2023 according to the World Platinum Investment Council (WPIC), which corresponds to more than 30 tonnes. Stable demand from industry and the automotive industry is meeting with a downward trend in production figures due to interruptions in the power supply in South Africa, the most important production country. The energy supplier Eskom regularly carries out so-called load shedding in order to stabilise the ailing power grid by “load shedding”. The looming deficit is now attracting renewed interest from the investment industry. Iridium also showed initial upward tendencies last week. Lively buying interest from Asia reawakened the market, but it remains to be seen how sustainable and long-term this initial movement is.
Last week, the European Central Bank raised the interest rate for the tenth time in a row to now 4.5 per cent. This is the highest level since the introduction of the common currency. Precious metals reacted positively across the board to the ECB’s decision. This is rather unusual, because usually interest rate hikes depress the gold price. The fact that it is different in this case is probably due, among other things, to the fact that an end to the cycle of increases is in sight; the high has tended to be reached with this. Similar observations were made on the stock market following the interest rate decision.
This week, the US Federal Reserve will hold its next meeting, and a hike in the interest rate band, which currently lies between 5.25 and 5.5 per cent, is not expected. It is possible, however, that this will take place at the November meeting.
“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.