Why precious metals will shine again

Precious metal prices may have taken a breather recently, but there's no reason to suggest the upswing of the past few years is over. Demand is strong and prices are likely to carry on rising.

Precious metals have taken a breather over the past few weeks. Gold and platinum have slid by around 14% from their March records; silver and palladium are a fifth and a quarter below their March highs respectively. But the upswing of the past few years in this sector of the raw material market looks far from over.

For starters, there is "further upside potential" in platinum prices, as Barclays Capital notes, given the prospect of further disruptions to electricity supplies, and hence mine output, in South Africa, which accounts for 77% of global production. Power problems are expected to persist for years.

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