Platinum Price Hits New 4-Year High But 'Gold Has Peaked' as Rising Rates Greet Biden
Thursday, 1/21/2021 15:32
TWO-WEEK highs in gold and silver prices following Joe Biden's swearing-in as US President were overshadowed Thursday by a spike to new multi-year highs in platinum.
All three precious metals then retreated as commodity prices fell, edging back $15 per ounce in gold to $1860 while silver dipped 40 cents to $25.60 and platinum fell $20 to $1136 before rallying back $10.
The
US Dollar meantime slipped further from last week's 1-month high on the currency market, while longer-term interest rates in the bond market rose as Democrat politicians in Washington started to debate
how to implement the new President's $1.9 trillion stimulus promises.
US stock markets opened Thursday flat after closing at yet more new all-time highs on Wednesday's inauguration, sparsely attended amid ultra-tight security due to Covid restrictions and the
pro-Trump violence of 6th January.
"Gold has peaked," reckons Netherlands bank ABN Amro's strategist Georgette Boele, writing over 5 months after the yellow metal's $2075 top, "[but] the outlook for platinum remains positive."
"We now expect slightly higher US nominal and real [bond] yields, a less dovish Fed and a moderate rise in the Dollar – all negatives for gold prices," she writes, cutting ABN's end-2021 target from $2000 to $1700 per ounce.
But because ABN has "substantially upgraded [its] outlook for the US economy" and therefore global industrial demand, "a strong Chinese economy will probably also result in higher demand for platinum jewellery" and that should mean rising
platinum prices.
"Third, we expect higher consumer demand for cars this year [and] more stringent car emission regulation results in more platinum content for car catalysts...[Overall] we expect demand to outpace supply."
Finding two-fifths of its end-use demand from diesel-engine catalysts in the 3 decades prior to
2020, platinum investing became the single largest source of demand last year.
Platinum prices spiked Thursday lunchtime in London to their highest since the peak of August 2016, touching $1156 per ounce.
With production of platinum-group metals "concentrated in South Africa, notes the latest weekly analysis from specialist consultancy
Metals Focus, "2020 supply was disproportionally disrupted by the country's strict lockdown, [with] restrictions on mining not fully lifted until the beginning of June."
That month then brought the
unexpected shutdown of a major processing plant, which combined with the Covid restrictions saw "platinum and rhodium output falling by around 21% year-on-year".
Now in the White House, Biden immediately began
rolling back 'isolationist' policies from Donald Trump's presidency, as well as
issuing new executive orders to try stemming the Covid pandemic's winter wave.
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