Platinum prices shot higher to near $850 an ounce earlier this week as the metal recovered from recent lows at $793 an ounce in the prior week. But as the dollar strengthened again later in the week, the precious metals eased lower with platinum prices slipping to near $830 an ounce, and to a $100 discount to palladium.
However, a continued robust global economy should underpin demand for the industrial commodities, specifically the PGMs, and for gold as rising consumer wealth levels promote increased jewelry sales. Downside price risk for the precious metals should also be limited from recent lows. But until the dollar begins to exhibit some signs of a reversal in its current strengthening trend, metal prices will continue to struggle with another test of recent lows probable.
And with the Fed expected to continue to ratchet up rates well into 2019, the markets will need some indication of a policy shift from the ECB, Bank of Japan and/or the Bank of England before the US currency may begin to reverse course and weaken.
Palladium prices also recorded a solid bounce off last week’s 12-month low, gaining nearly 9% to near $942 an ounce before slipping below $930 an ounce to close out the week. Demand for palladium remains firm with passenger car sales reported in the first half of 2018 showing largely steady gains. Sales in the major markets were mostly higher in the period: China’s passenger car sales increased 4.6% in the first half with gains also reported in the US (+2.0%) and in the EU (+2.9%) markets.
Only a loss of sales was seen in the Japanese market with new registrations for passenger cars down 2.3% in the six months ending June. The palladium market remains in a sizable supply deficit which could, along with continued advances in global car sales, act to limit further declines in the value of the metal much below recent lows.
Rhodium prices continued to march higher with offers reaching $2,350 an ounce this past week, although easing by $10 an ounce by the weekend on purported limited Asian selling. Demand remains firm despite threats of tariff wars and a sizable downtrend in platinum and palladium prices in recent months.
Material contained in this report is based upon publicly available market data believed to be accurate and reliable and is presented for informational purposes only. KMR assumes no warranty or liability for its completeness, nor guarantees future market performance. Further, KMR assumes no liability for direct or indirect loss or damage from the use of information contained in this report, or from any unforeseen errors or omissions.