Platinum Price Outlook – September 2023

“After declining during the first half of August, platinum prices staged a recovery during the second half of the month. In the middle of August prices bounced off $880, which has been an important support level for platinum prices. Prices then rose to touch an intraday high of $993.30 on 30 August, before pulling back once again.

Platinum prices have largely been moving between $900 and $1,000 since the middle of June. Prices could break out of this range during the last several months of 2023. PGM prices might fall, with platinum dropping below $900 briefly, if the Big Three U.S. auto manufacturers are struck next week. After that, or if the strike is averted, platinum prices could be pulled higher by strong gold and silver prices as well as seasonal strength in platinum prices. While there are broad market factors that could drive platinum prices higher, the metal’s own supply and demand fundamentals are less likely to help drive prices up sharply. The increased use of platinum in gasoline auto catalysts, healthy demand for commercial vehicles in most major auto markets, the possibility of supply side disruptions in South Africa (Eskom has implemented stage six load shedding at the start of September), and the competitive relative value of platinum with palladium are all factors that are helping to support platinum prices.

These factors, however, are getting offset by an ongoing increase in battery electric vehicles (BEVs) market share and slowing growth in China, which is expected to weigh on demand for both commercial vehicles as well as platinum jewelry demand in that country.

Platinum prices are likely to move sideways to higher in this environment, with initial resistance around $1,000, which if broken could take prices toward $1,060. Supply side disruptions in South Africa could help drive prices higher. At the start of September Eskom – South Africa’s state-owned utility – implemented stage six (of stage one to eight) loadshedding, which removes around 6,000 megawatts of power from the grid. This was done to perform maintenance and was timed to coincide with the end of South Africa’s winter months when electricity demand rises. On the downside, platinum prices have strong support at $880 a break of this level could take prices toward $840.”