Gold is often described as the king of precious metals, but this article noted that after a strong start to 2014, its price had steadily declined, affecting sentiment and confidence among gold-coin investors. It used that observation to argue for diversification. Whether an expected gold rally would occur soon or over several years, the article said demand and returns in platinum and palladium had been strong; these metals were often considered silver’s other white-metal counterparts. It also cited an April 2014 Reuters article report indicating that heavy liquidation had helped drive gold-bullion sales to their lowest level since 2007, while platinum demand appeared to be increasing.
Mining Strikes in South Africa
Strikes can move attention toward investment areas outside the public’s immediate focus and can also signal possible short-term shortages. The original article said South African strikes, begun in January and then showing no immediate sign of resolution, combined with a 15,000 ounce gap in Russian production to limit new platinum supplies reaching the open market. A Mineweb article identified a 1975-level platinum shortfall exceeding 1.2 million ounces. Together with the South African strike, it characterized that shortfall as a compelling supply-and-demand backdrop for higher platinum prices, even with nearly 200,000 ounces recycled for reuse.
Why the Metals Are Performing Well
In “Precious Metal Platinum Quickly Turning Chinese”, Forbes said European automotive demand and Chinese jewelry demand would increase interest in ownership. The article noted that urban Chinese women were increasingly choosing platinum wedding rings, while rising personal incomes in China represented nearly 25% of platinum-jewelry demand in 2013. Between 2012 and 2013, the Shanghai Gold Exchange was reported to show an almost 50% increase in platinum futures trading.
Importance and Industrial Uses of Palladium
At the time of original publication, the article described the following: Palladium, a platinum-group metal, received comparatively little media attention but had established uses in platinum substitution for catalytic converters, jewelry and electronics manufacturing, chemical applications, and dental work. The article said Mineweb projected a comparable supply-and-demand deficit, with a 34-year shortage of more than 1.6 million ounces due to reduced South African and Russian output. Unlike fiat currency, it argued, an easing of supply raises metal prices and could hinder production of emissions-reducing catalytic converters in new vehicles. China had recently announced emissions standards expected to remove about 6 million vehicles from the road, and the article therefore anticipated strong metal demand as older vehicles were replaced with more emissions-friendly automobiles.
At the time of original publication, the article described the following: Like silver, often produced as a byproduct of copper or gold mining, palladium is mainly found alongside platinum in South African and Russian mines. According to the North American Palladium website, less than 15% of the metal was mined in the United States. In December 2013, Kitco projected an almost 10% global supply deficit that could contribute to higher palladium prices. The article said this might make a few Chinese Pandas or American platinum eagle coins worth considering. At publication, readers seeking the business’s current inventory were invited to click here.
