Platinum hits bottom

Weakness in the eurozone has hit the price of platinum.

Platinum has lost its polish. The price of the metal has sunk to below $1,120 an ounce, depths it hasn't plumbed since the aftermath of the global financial crisis six years ago. Demand for the metal has been hit by the weak eurozone economy.

The eurozone is the world's biggest market for diesel cars, which use platinum-based catalytic converters. These account for around 40% of overall platinum demand.

Meanwhile, supply has recovered following a five-month strike in South Africa, the main supplier of mined platinum, in the first half of the year. As a result of increased supply and lower demand, the market deficit (the gap between the two) has shrunk by around 60%.

But has the slide gone too far? Despite the ongoing threat of Greece leaving the eurozone, the European economy is showing signs of recovery. European car sales recently rose for the first time in six years. The economic recovery in India, along with tighter emissions standards, should stimulate emerging-market demand.

Low prices bode well for jewellery demand, which comprises around 38% of the total. And further strikes in South Africa can't be ruled out. GFMS, a metals consultancy, reckons that there is scope for "a modest uptick" in prices to the $1,300-1,350 range this year.

Recommended

How to invest in gold
Gold

How to invest in gold

Gold can be a good way to diversify your investments and help during difficult markets. We look at how to get started with the precious metal.
26 Jan 2023
What does the next decade have in store for investors?
Investment strategy

What does the next decade have in store for investors?

Investors face a “sea change” in the investment environment. Dominic Frisby explains what this could mean for your money.
20 Dec 2022
Help your portfolio take off with helium
Commodities

Help your portfolio take off with helium

Dominic Frisby looks at the coldest substance on earth, helium, and explains why now’s the time to buy.
30 Nov 2022
These 2 stocks are set to soar
Commodities

These 2 stocks are set to soar

The returns from these two aluminium and tin stocks could be spectacular when the commodity cycle turns says David J Stevenson.
16 Nov 2022

Most Popular

Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

New interest rates will be announced on 2 February – we look at what to expect.
26 Jan 2023