Platinum Price Set to Remain Steady
Platinum continued to fall last week and at one point dropped below $1410 before finishing slightly up at $1419.
After a strong start to the year, its gains have been reduced to 4.3% as the downwards trend continues.
Platinum is strongly linked to the European diesel vehicle market which has been putting the price under pressure recently due to weak European economic data and a weak Euro.
South Africa is home to about 80% of the world’s known platinum preserves; however, platinum production in the country is expected to be reduced by about 30% this year, mainly due to a five month long strike by mine workers.
Workers for Lonmin reached an agreement with the company at the end of May and since then the company has been focusing on ramping up production.
As a result there doesn’t appear to be concerns that demand will seriously exceed supply and as such the price is not expected to rise in the near future.
However, analyst estimates compiled by Bloomberg suggest that by the second quarter of next year the price of platinum will rise to $1,562. While this is not a huge gain, it does suggest that those with money in platinum should be patient and bide their time before selling.