Platinum Price Outlook – April 2024

“Platinum Price Outlook
Over the course of March platinum prices were dragged higher along with strength in gold prices. That said, platinum prices still are lower than levels at which they started this year. While strength in gold prices typically has a positive impact across the precious metals complex, that factor alone cannot offset any weakness in the fundamentals of the individual metals within the complex.

Not only platinum but all of the platinum group metals (PGMs) are presently going through a challenging phase, with fabrication demand from their largest use – autocatalysts – under threat from the electrification of the automotive industry and ample supply of these metals.

While the market and investor sentiment toward the PGMs is negative at this time, with good reason, there are some bright spots. Commercial vehicle demand, which is an important component of platinum fabrication demand, has been holding up fairly well across major markets. Mine supply also is likely to decline in coming years as high production costs and weak metal prices put older and more costly mines out of business and stymy development of less attractive PGM-bearing deposits. There also is an ongoing risk of electricity shortages in South Africa, which could disrupt mine supply.

Some market participants would add concerns about Russian supply disruptions due to political factors, but that seems less likely of a risk to supply. A more likely development would be production reductions due to stringent trade and financial restrictions on Russia, which could cause a smaller reduction in Russian platinum production and exports than any outright political actions by either the Russian government or other governments.

These factors are expected to keep platinum prices supported but are not likely to result in any meaningful strength in prices unless there is an actual drop in supply.

Prices have been largely moving in a range between $900 and $950 since the beginning of March. At this time, prices are at the upper bound of that range. If gold prices continue to rise, platinum prices could come along for the ride, but such gains may not be sustained unless there is a fundamental reason to drive platinum prices higher. Forecast near-term weakness in the precious metals complex coupled with lackluster fundamentals is expected to weigh on platinum prices. ”