Platinum is an Overlooked Precious Metals Investment
Platinum is known for its value and scarcity, attributes that make it attractive when compared to other Precious Metals (PMs) and financial assets. As one of the rarest financial assets there is, platinum could be a stand out asset over the coming decade.
As a result of the COVID-19 pandemic, the platinum mining industry has suffered as government lockdown measures limited platinum’s industrial activities globally. This has led to a near 95% drop in South African production, which may not be resolved in the coming year.
An updated 2020 forecast has moved its market into an annual deficit of -336 Koz compared to the prior estimate of a +247 Koz surplus, and investment demand for the metal has picked up as other precious metals have come under increasing demand.
An Undervalued Asset
The decline in refined production and recycling supply in the platinum space could lead to potential price hikes. Wild central bank policies appear to be driving investor demand for hard assets, with platinum bar and coin demand forecast to by 113%, reaching 600koz in 2020.
Although platinum’s performance varies depending on the state of the global economy and the laws of supply and demand, this is also true for other investment assets.
Unlike manufactures’ shares that rely on government bailouts and equity investors to have value, platinum is leveraged to both the industrial cycle – and safe haven buying. As a hard asset, platinum has no counterparty, and will have value regardless of central bank policy.
While gold offers less to investors that want to have exposure to an economic recovery, platinum will allow your portfolio to play offense and defense simultaneously. At Liemeta we can help you find the right platinum products to fit your investment goals.
Please give us a call to learn more, or look at the information on our website, https://liemeta.com.cy/
Platinum Occupies a Unique Position in the PM Market
Platinum differentiates itself from other precious metals by offering extensive applications in the market. It’s currently used in the automotive, jewelry, recycling, petroleum, chemical, electrical, glass, medical, and biomedical industries.
The precious metals industry as a whole has been affected by the global pandemic. With many platinum-dependent industries suffering as the world’s economy stopped, there could be new opportunities opening as the global market starts stabilizing.
Both glass and medical industries have maintained higher demand and show signs of improvement when compared to other markets affected by the crisis, as both are vital to overcoming the medical issues the world presently faces.
The Automotive Industry is Moving Again
By being one of the first countries to control COVID-19 and enable the return of industries, China has spurred a strong recovery for platinum, especially in the automotive sector with the help of its partial adoption of China 6 light-duty and China VI heavy-duty vehicle emission regulations.
Platinum plays a crucial role in facilitating the hydrogen economy by generating green hydrogen and for its use in fuel cell electric vehicles.
European automakers have been preparing technical changes to reduce new CO2 emissions for many years. Platinum demand is expected to grow as automakers employ it for CO2 reduction strategies.
Although data on the quantity of platinum used cannot be released by these manufactures, it is suggested that it is large and will move the PGM market.
The Jewelry Comeback
As restrictions eased, China’s jewelry recycling more than doubled during Q2’20 compared to Q1’20. Despite other countries not showing this same growth, the world has shown higher interest in platinum jewelry, allowing more demand to enter the market.
Platinum price attractiveness when compared to gold should continue until prices move up substantially, as platinum is far rarer than gold.
Other countries are expected to show an increase in the jewelry industry towards the end of the year by appealing to both retailers and consumers as a result of its widened discount compared to gold.
In addition to this, the global bridal market is expected to return, and may boom as rescheduled weddings affected by COVID-19 go ahead. There is probably significant latent demand for platinum from across a range of industries, once this demand becomes active, the price of platinum will likely shoot higher.
A Good Time to Invest
Positive platinum market fundamentals are presumed to provide an added appeal to platinum from an investor perspective. Its forecast deficit, demand growth potential, and price discounts to gold and palladium all contribute to platinum’s value proposition.
While COVID-19 affected the platinum demand equation, it also contributes to the growth of investment demand since global authorities’ monetary and fiscal policy response to the pandemic resulted in huge amounts of money creation.
The global economy is still in a difficult situation, but buying precious metals is simple with us. If you want to add to your PM positions, or make your first purchase, get in touch with us today.
At Liemeta we know the PM markets – and can offer you the best products. If you need some help deciding which metal would work best for your goals, or you need to find a specific product, please contact us through the form below and we will be happy to revert to you.
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This information is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, or as investment advice in general.