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

Alicia Villegas
Alicia Villegas speaks Spanish and Italian and is Iberia Correspondent for InvestmentEurope. She was shortlisted for the Rising Star Award at the British Media Awards 2017 and Writer of the Year at the PPA Independent Publisher Awards 2016. Previously, she worked for almost three years at the seafood business website Undercurrent News as a market reporter. In Spain, she also worked for more than five years for several media outlets.

Read more from Alicia Villegas

Close Window
View the Magazine

I also agree to receive editorial emails from InvestmentEurope
I also agree to receive event communications for InvestmentEurope
I also agree to receive other communications emails from InvestmentEurope
I agree to the terms of service *

You need to fill all required fields!