Even as the investors are busy replenishing their portfolios as
and when the gold prices dip, it is time for them to take note of
other areas like platinum.
According to a report in Telegraph, the upside in platinum
prices over the next few years could be better than gold, and the
general consensus is that a buying opportunity is likely to present
itself in the next two months.
The report added that the platinum price has fallen by almost
15% since it hit a 21-month high of $1,745 an ounce at the
end of April. The metal now costs about $1,510 an ounce.
However, the price could fall by another $200 over the next
couple of months. A fall to $1,442 would confirm that a major
reversal lower has been taking place.
Dealers remained nervous about both platinum and palladium as
they see more liquidation coming soon. Technical support for
platinum is at $1,485 and $1,450.
Platinum demand should improve in the fourth quarter. However,
weak metals prices are not guaranteed over the next few months, so
investors looking out for a buying opportunity need to keep their
eye on the market. There is a distinct possibility these expected
price falls may not materialise.
A continually weakening dollar could stop the price slide in its
tracks, as a falling US currency provides support for precious
metals such as platinum.
The dollar fell to a nine-week low against the euro last week.
The market is starting to catch on that US public debt is surging
to 100pc of GDP - and the focus of sovereign debt concerns is
A continuation of market worries about a double-dip recession in
the US and its massive debt woes could lead to further falls in the
world's reserve currency - and cause analysts to rip up their
bearish expectations for precious metals prices over the next few
Platinum prices are also more dependent on the European economy
than other metals. The European auto sector is dominated by diesel
engines, which mainly use platinum rather than palladium in their
autocatalysts. Investment demand, particularly in the first half of
the year has been strong.
The platinum exchange-traded funds (
) have absorbed more than 370,000 ounces of the physical metal in
2010. Metals consultancy CPM Group recently noted that ETF holdings
of platinum had declined over the last few months, but it argued
that the metal would still be attractive for investors because of
the supportive supply and demand situation.
The consultancy expects total supply, including recycling, to
rise 5.5pc to 7,468,461 ounces this year, as higher prices prompted
mines that had been mothballed to be brought back on stream.