Platinum Stocks Have Room For Improvement In 2014
In 2013, the price of platinum took a big knock.
Analysts cited adequate inventories as well as sympathy selling as the reasons for this decline.According to Bart Melek, the head of commodity strategy with TD Securities, this commodity should see an improvement in 2014.
While this seems positive, make no mistake that this improvement is only expected after a “rough ride”.
The reason for this is that the U.S. Federal Reserve is currently cutting back its bond-buying and this is likely to put major pressure on the gold price which could then negatively impact the price of platinum.
Meanwhile, according to HSBC, the losses seen in 2013 came in response to a much larger gold market and also to a big transition by investors from hard assets to equities.
Despite this, according to Jim Steel, precious-metals analyst at HSBC, platinum is likely to see an increase in 2014, listing a 2014 outlook of $1,625.
HSBC also listed a 2013 supply deficit of 889,000 and a smaller one of 402,000 for 2014.
Platinum is currently trading at $1,463 per ounce and unfortunately, the mineworkers’ strikes in South Africa could dampen the recovery of this metal.
According to the CEO of Shanduka Group, which owns 18% stake in Lonmin’s platinum mines in South Africa, it is vital for companies such as Anglo American Platinum to coexist with labor unions rather than attempt to mechanize the mining operations.
The Lonmin mines are responsible for producing three quarters of the world’s platinum.