Platinum prices climbed to their highest level in over six years on Monday, buoyed by expectations of a wider supply-demand deficit for the industrial metal on hopes for a swift rebound in the global economy.
Platinum, used in catalytic converters that limit emissions from automobile engine exhaust systems, rose 2.4% to $1,282.55 by 1007 GMT, having touched $1,288.50, its highest since January 2015.
“Investors have started to realize there’s upside potential for platinum prices, so its catching up to other precious metals,” said ABN Amro analyst Georgette Boele, adding the industrial outlook has improved for platinum.
Platinum will likely continue to outperform both palladium and gold, but it is unlikely to revert back to trading at a premium to gold, she added.
Specialist materials firm Johnson Matthey predicted a third consecutive annual deficit for platinum this year.
Analysts also said longstanding supply issues of the metal in top producer South Africa could lend further support to the industrial metal by potentially widening its supply deficit.
Spot gold eased 0.4% to $1,816.40 per ounce, pressured by a jump in U.S. Treasury yields, which topped a near 11-month peak on Friday. Higher yields increase non-yielding bullion’s opportunity cost.
U.S. gold futures fell 0.3% to $1,818.10.
“The safe-haven status of gold is not holding as much shine as it once did, while we’ve a lot of optimism around economic growth,” said Michael McCarthy, chief market strategist at CMC Markets.
Market participants also await minutes of the U.S. Federal Reserve’s Federal Open Market Committee meeting at the end of January, due on Wednesday.
“Gold’s overall technical position remains fragile, and will come under renewed downward pressure this week, if U.S. yields continue moving higher,” OANDA senior market analyst Jeffrey Halley said in a note.
Silver rose 0.6% to $27.50 per ounce and palladium rose 0.4% to $2,397.20.
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