Platinum will regain its shine

Platinum futures have slumped to around $840 an ounce, a near-ten-year low. But the gloom looks overdone.

904_COTW

Platinum futures have slumped to around $840 an ounce, a near-ten-year low. The metal is used largely for catalytic converters in diesel engines. The diesel emissions scandal at VW, in addition to the potential damage to car makers from a trade war, has raised fears of a sharp fall in demand.

But the gloom looks overdone, says Myra P Saefong on MarketWatch. Platinum now costs less than gold, despite being rarer; it is also generally pricier than palladium, but last September was trading lower for the first time since 2001.

Wealthier emerging-market consumers and stricter pollution controls should continue to stoke demand for cars and converters, while diesel engines are more fuel-efficient than petrol ones.

Viewpoint

"It is well known that productivity, measured by output per hour, is about a fifth below where it should be on the basis of past trends, and that productivity is about a third higher in Germany, France and the US. Less well known is the size of the productivity gap within Britain. The productivity gap between the top and bottom 10% of performers in Britain is 80% larger than in competitor countries and, as importantly, that gap between the best and the worst has increased by two to three times since the crisis. As [Andrew Haldane, the Bank of England's chief economist, puts] it: A long... tail of stationary companies explains why the UK has a one-third productivity gap with its international competitors. And that same tail is also an important reason why the UK has a one-fifth productivity gap relative to the past.' The long tail is wagging the low productivity dog."

David Smith, The Times

Recommended

Can China hold the world to ransom over access to rare-earth metals?
Industrial metals

Can China hold the world to ransom over access to rare-earth metals?

China’s stranglehold on rare-earth minerals – resources essential for our modern high-tech world – has some analysts worried. Should we be too?
6 Mar 2021
How to invest in tin: a crucial metal whose price is set to soar
Industrial metals

How to invest in tin: a crucial metal whose price is set to soar

The price of tin, a versatile and increasingly important substance, has reached a ten-year high. There are plenty more gains ahead, says Dominic Frisb…
5 Mar 2021
The MoneyWeek Podcast: strategic metals, the commodities supercycle and the electrified future
Commodities

The MoneyWeek Podcast: strategic metals, the commodities supercycle and the electrified future

John Stepek talks to Dr Paul Jourdan, CEO of Amati Global Investors, about investing in the metals needed for the post-oil electrified world, the impo…
26 Feb 2021
How to buy into the next big commodities bull market
Commodities

How to buy into the next big commodities bull market

Commodity prices move in cycles. And we’re at the start of the next big uptrend as a shortage in supply hits a surge in demand. Merryn Somerset Webb p…
8 Feb 2021

Most Popular

A beginner’s guide to bitcoin: where to store your bitcoins
Bitcoin

A beginner’s guide to bitcoin: where to store your bitcoins

Once you've got hold of some bitcoins, you need somewhere secure to keep them. Dominic Frisby outlines some of the best options, from exchanges to col…
4 Mar 2021
A beginner’s guide to bitcoin: the technical genius behind bitcoin and the blockchain – and how it all works
Bitcoin

A beginner’s guide to bitcoin: the technical genius behind bitcoin and the blockchain – and how it all works

In the second in his series on bitcoin, Dominic Frisby looks at the blockchain – bitcoin’s unique underlying architecture – and what makes it and the …
2 Mar 2021
The great rotation is firmly underway – what does it mean for you?
Stockmarkets

The great rotation is firmly underway – what does it mean for you?

As investors move away from “jam tomorrow” stocks and back into “old economy” stocks that should benefit from the post-pandemic recovery, the tech-hea…
5 Mar 2021