Trends in the commodity industry change and it seems at present, platinum may be in the ascendancy. According to a report in the Daily Telegraph, the metal has a brighter outlook as demand rises. At the same time, gold may be losing its “lustre”, the publication suggested.
It noted that the platinum industry is in the middle of a “significant shake-up”. After strikes at some South African platinum mines last year, Anglo American Platinum, or Amplats, is on the verge of announcing a comprehensive business review. The most likely outcome of this is expected to be lower production as high-cost mines are “mothballed”.
This firm is the world’s largest producer, while South Africa mines around 80 per cent of metal globally. Extracting the material can be expensive and dangerous because deposits tend to be very deep, while temperatures are high. Meanwhile, costs between mines can vary significantly, with some being much more expensive than others.
The news source went on to note that the difference between the price of gold and platinum has been narrowing from $100 (£63) a troy ounce to just $30.50. Whereas gold is now around $1,662.80 an ounce, spot platinum is $1,632.25.
The Telegraph suggested that there is a “real chance” that the price of platinum could rise above that of gold in the next few months.
According to the publication, professional investors like hedge fund managers are becoming “increasingly bullish” about platinum and have increased their ‘net long’ position in the in New York-traded platinum futures. It based this assessment on data from the weekly Commodity Futures Trading Commission’s Commitment of Traders report.
No doubt investors will be keeping a close eye on any developments in global commodity prices over coming weeks and months. By ensuring they are always in the loop when it comes to commodities, individuals and organisations stand to achieve much more favourable outcomes.