Gold 
“Year-to-date, platinum prices have given back all the gains of December 2023. Prices now are testing the lows of 2023. Prices most likely will consolidate around $900 in the near term, but are vulnerable to the downside if there is a broad market sell-off. Such a sell-off is possible and the trigger for this sell off could be the January U.S. consumer price index data set for release next week on 13 February. markets have been counting on weakening inflation data but there have been some signs that inflation may struggle to come down in 2024. Any signs of stagnation or strength in inflation data could trigger a broad market sell off as investors recalibrate their interest rate expectations for 2024. These expectations, which are for rates to be lowered, seem too optimistic given the current strength of economic activity.
If such a broad market sell off were to occur a drop in platinum prices toward $800 is very likely to materialize. in the absence of such weakness, platinum prices are expected to move in a sideways fashion between $850 and $950.
The biggest upside risk to platinum continues to come from a potential reduction in supply. Mining companies are under tremendous cost pressures, which could result in reduced output from some of the higher cost mines. Electricity shortages also remain a threat to mine supply from South Africa.
The ongoing increase in the platinum and palladium ratio since late 2022 has some market participants questioning how long the substitution of palladium with platinum in gasoline auto catalysts will continue and if this factor will continue to be a headwind for palladium going forward. The reality is that auto catalyst manufacturers are unable to and do not make major changes to catalyst chemistry on the turn of a dime. There is a lot of time and money required to make these changes and to align them with emissions regulations and auto engines. Auto manufacturers also are expected to invest more of their time and resources on developing electric vehicles, which are the future. As a result, platinum is expected to remain a part of the gasoline auto catalyst providing support to its fabrication demand and price. That said, with the platinum:palladium price ratio near one, much of the benefit for platinum from this factor seems to be behind the market.”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
