Platinum and palladium: ZAR and RUB softness pressures prices
Precious metals are facing a harsh autumn breeze these days. Palladium dropped below $650 per ounce [on 12 October] while platinum temporarily dipped below $950 per ounce.
The strength of the US dollar weighs on prices and the past days’ softness of the South African rand and the Russian rouble turned into a direct negative impact.
The rand suffers from ongoing political quarrels that the globally well-respected finance minister is finding himself in. Investors generally seem to be in a wait-and-see stance towards precious metals.
The latest price weakness translated into profit-taking and incremental outflows from physically backed products. Still elevated long positions in the futures market suggest that these trends could continue in the very near term.
Meanwhile, global car sales are slowing down at record levels. Platinum and palladium demand for catalysts should remain strong.
China is expected to report solid sales data for September where the cyclical dip is likely more than offset by seasonal strength.
That said, slowing global car sales could deliver headlines that weigh on sentiment going forward. It will take some time until the focus returns to the platinum and palladium market’s future deficit risks.
Platinum and palladium dropped below $950 and $650 per ounce respectively [on 12 October] as headwinds from a soft ZAR and RUB picked up. Investors seem in a wait-and-see stance and it will take some time until the focus returns on the looming supply deficit.
Norbert Rücker is head of Commodities Research at Julius Baer