Platinum prices to be a largest upside in 2021!

Platinum an investment alternative to gold! 

Recently in January 2021 ABNAmro said, “We think that platinum prices have the largest upside potential this year. Slowly but surely the stars are aligning for this precious metal. First, a positive outlook for gold prices also supports the outlook for platinum. They are both used in jewellery and we expect a modest rise in jewellery demand especially from China (largest market for platinum jewellery).” 

Moreover, some investors buy platinum as an investment alternative to gold if gold prices become expensive. Second, we expect an ongoing recovery in the industrial sector that will probably result in higher industrial demand for platinum. Third, we expect higher consumer demand for cars this year. 

Meanwhile, more stringent car emission regulation results in more platinum content for car catalysts. So we expect platinum demand for car catalysts to rise. Fourth, fuel cell technology for cars will continue to get more attention. Platinum is used in hydrogen cars and the content needed exceeds what is needed in regular diesel car converters. 

Last but not least, platinum is the cheapest precious metal. The ratios of platinum to gold, silver and palladium are still at very low levels. In short, we are positive on platinum as we expect demand to outpace supply. But the total ETF positions are at all time high and some profit taking could result in temporary price weakness. 

By focusing more at palladium prices ABNAmro said, modest upside! “We also expect higher palladium prices in 2021 but the rise will probably be modest. There is still a supply shortage because of higher palladium demand for car converters to meet the more stringent emission standards in China and Europe in the future. We expect a rise in car sales in China, Europe and the US and higher palladium loadings in converters. 

We also expect higher industrial demand because of the ongoing recovery in the global industrial sector. The positive trend in gold and the other precious metals will probably spill-over to palladium as well. But it is unlikely that palladium will be used a lot in jewellery or as an investment vehicle. So palladium is mainly a cyclical play, but the market is very thin.