Expect a rebound in the price of platinum

Platinum prices, which fell by almost 20% in the past year, are set to recover. Unlike most metals, platinum isn’t well supplied: output in South Africa, which accounts for over half of supply, is continually interrupted by strikes.

The latest stoppage began two weeks ago, and unions and managements seem unlikely to agree on wage levels – which have been climbing across the sector – any time soon; 40% of global output is being lost to the strike every day. Electricity shortages and rising energy costs are also hampering production.

While the market is already in deficit and supply faces disruption, demand is recovering, says Capital Economics. Platinum is used in catalytic converters for diesel cars, making up 40% of overall demand.

Europe is the top market, as 45% of its cars are diesel-powered, compared to an average of 12% elsewhere. Car sales are likely to pick up this year after falling for six years as Europe’s economy recovers.

Platinum is also gaining market share in the jewellery sector (35% of demand).

Investment demand (6%), which comes mainly from exchange-traded funds, should remain steady. All this adds up to a bullish outlook for platinum, with Capital Economics forecasting a price rise of 20%.

66% off newsstand price

12 issues (and much more) for just £12

That’s right. We’ll give you 12 issues of MoneyWeek magazine, complete access to our exclusive web articles, our latest wealth building reports and videos as well as our subscriber-only email… for just £12.

That’s just £1 per week for Britain’s best-selling financial magazine.

Click here to take advantage of our offer

Britain is leaving the European Union. Donald Trump is reducing America’s role in global markets. Both will have profound consequences for you as an investor.

MoneyWeek analyses the critical issues facing British investors on a weekly basis. And, unlike other publications, we provide you with the solutions to help you turn a situation to your financial advantage.

Take up our offer today, and we’ll send you three of our most important investment reports:

All three of these reports are yours when you take up our 12 issues for £12 offer today.

MoneyWeek has been advising private British investors on what to do with their money since 2000. Our calls over that period have enabled our readers to both make and save a great deal of money – hence our position as the UK’s most-trusted investment publication.

Click here to subscribe for just £12