Platinum Price Skyrockets to 2024 High as Demand Surges
Platinum prices have hit a high of $1,095 per ounce on Monday, reaching their highest level since March 11th. The precious metal has been on a strong uptrend this year, mirroring the performance of other industrial metals like copper and zinc, as well as precious metals like silver and gold, which have been in a bull run.
The surge in platinum prices can be attributed to a mismatch in demand and supply. According to a recent report by the World Platinum Council, automotive demand for platinum reached a seven-year high in Q1 of this year. Jewelry and investment demand also continued to rise, while industrial demand dropped slightly from its record high in 2023 but remained higher than pre-pandemic levels.
On the supply side, platinum production has plummeted to its lowest level in decades, leading to a supply deficit for the second consecutive year. The council estimates that supply will remain flat at 7,111 koz while demand is expected to rise to 7,587 koz. Mining companies have reduced production due to price movements and concerns about the shift towards electrification in the automobile industry.
Despite these challenges, data shows that internal combustion engine (ICE) vehicles are still prevalent, as evidenced by the strong performance of companies like Toyota, Stellantis, and General Motors. This has boosted hopes for platinum, as investors anticipate a supply squeeze similar to what happened in the cocoa industry due to lack of investments.
The outlook for platinum remains bullish, with the price chart showing a strong upward trend and forming a golden cross pattern. However, short-term turbulence is expected as a bearish engulfing pattern has formed, indicating a possible reversal in the near term. Overall, the rising demand and supply constraints suggest that platinum prices are likely to continue their upward trajectory in the coming months.
