A Momentum Lead Capitulation in Platinum, A Major Triple Bottom Develops?
3rd July 2018 - D Mitchell
Platinum has recently seen a dramatic fall in price. In just over two weeks from 1st June 2018 the noble metal has crashed from $910 to a low today of $798.50, a near 12.25% fall - what could be causing this overwhelming rout?
The common themes highlighted in the financial press are as follows:
- Platinum markets fell this week as global fears continued about trade disputes, economics slowdowns and rising interesting rates, all of which could help demand - In fact we are seeing global demand for vehicles and strong demand in the PGM's (platinum group metals) where Palladium, Rhodium and Ruthenium are all holding higher prices.
- Almost 40% of Platinum's demand comes from the automotive industry, where is it used in catalytic converters, especially in diesel vehicles. However, demand for diesel vehicles has collapsed worldwide following the Volkswagen emission scandal of 2015, when it was revealed that many diesel vehicles polluted far more than advertised - Again this is not strictly correct as major developments by the car manufacturers to improve lower emissions via catalytic loading of higher Rhodium and Platinum content, hence the huge rally in Rhodium over the last 18 months.