Platinum soared to its highest level since 2014 on Thursday, fueled by supply concerns and a wave of speculative buying.
By midday, the precious metal had gained nearly 5% to trade at $1,406 an ounce, after hitting a fresh 11-year high of $1,416 earlier. Palladium also jumped by 4.8% to about $1,111 an ounce.
Earlier this month, platinum surged past the $1,200-an-ounce mark for the first time in four years amid signs of growing market tightness.
“The recent surge in Chinese investment and jewelry replacement is shining a spotlight on platinum’s supply deficit,” Justin Lin, an analyst at Global X ETFs, told Bloomberg.
Commenting on palladium’s rally, Lin said the metals are “intrinsically linked” as they can be substituted for one another for use in autocatalysts depending on relative prices, so “we can expect some positive momentum in palladium off of platinum’s rally.”
According to Bloomberg, the dominant platinum spot market in London and Zurich has shown signs of tightness for months, after approximately half a million ounces surged into US warehouses due to tariff concerns.
Forward prices for platinum are now trading well below spot, a situation known as backwardation, which indicates tight market conditions.
The implied cost of borrowing the metal is also still high, at an annualized rate of roughly 13% for a one-month lease, well above the usual rate of close to zero, Bloomberg reported.
(With files from Bloomberg)
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Platinum soared to its highest level since 2014 on Thursday, fueled by supply concerns and a wave of speculative buying.
By midday, the precious metal had gained nearly 5% to trade at $1,406 an ounce, after hitting a fresh 11-year high of $1,416 earlier. Palladium also jumped by 4.8% to about $1,111 an ounce.
Earlier this month, platinum surged past the $1,200-an-ounce mark for the first time in four years amid signs of growing market tightness.
“The recent surge in Chinese investment and jewelry replacement is shining a spotlight on platinum’s supply deficit,” Justin Lin, an analyst at Global X ETFs, told Bloomberg.
Commenting on palladium’s rally, Lin said the metals are “intrinsically linked” as they can be substituted for one another for use in autocatalysts depending on relative prices, so “we can expect some positive momentum in palladium off of platinum’s rally.”
According to Bloomberg, the dominant platinum spot market in London and Zurich has shown signs of tightness for months, after approximately half a million ounces surged into US warehouses due to tariff concerns.
Forward prices for platinum are now trading well below spot, a situation known as backwardation, which indicates tight market conditions.
The implied cost of borrowing the metal is also still high, at an annualized rate of roughly 13% for a one-month lease, well above the usual rate of close to zero, Bloomberg reported.
(With files from Bloomberg)