The World Platinum Investment Council (WPIC) has just released new forecasts for the Platinum market, revealing some surprising developments. According to Commerzbank’s Commodity Analyst Carsten Fritsch, the supply deficit is expected to more than double from previous estimates, reaching a record level of over 1 million ounces. This marks the second consecutive year of deficits, with demand outpacing supply by 731 thousand ounces last year.
Investment Demand Driving Growth
The major factor behind this upward revision is the surge in investment demand. The WPIC has identified a growing appetite for larger Platinum bars in China, which is expected to drive robust investment activity this year. Additionally, Platinum ETFs are projected to see net inflows, contrary to previous assumptions. Industrial demand, excluding the automotive sector, is also forecasted to be stronger than initially anticipated.
Despite a slight increase in mine production, a dip in recycling supply is expected to result in an overall decrease in supply compared to previous forecasts. Surprisingly, the tight market conditions have not yet translated into a significant price increase for Platinum. While the price has rebounded from recent lows, it remains below $1,000 per troy ounce, with a notable discount to Gold.
Analysts believe that Platinum has substantial upside potential, given the current market dynamics and growing investment interest.
Analysis:
The Platinum market is experiencing a significant shift, with supply deficits reaching record levels and investment demand on the rise. This presents a compelling opportunity for investors to capitalize on potential price gains in the Platinum market. With strong industrial demand and increasing investment activity, Platinum’s value could see a significant boost in the near future. Keeping a close eye on market developments and staying informed about the latest trends is crucial for making informed investment decisions in the precious metals sector.