Think petrol-powered cars are dead? Tell that to investors
As you would expect, the price of gold surged anew alongside that of oil after Israel launched a wave of attacks on Iran. Rising global instability is meat and drink for gold bugs; there's nothing they like more than the sight of fighter jets on the move.
But hold on, what's this? Prices are also surging in that largely forgotten corner of the precious metals markets, platinum, and it's got very little to do with Iranian ambitions for a nuclear bomb.
Rather, it is the growing conviction that there is life after apparent death for the internal combustion engine (ICE). Despite the best efforts of policymakers to kill them off, petrol-fuelled cars are experiencing something of a comeback in more environmentally acceptable, hybrid form. The market for traditional all petrol cars is also continuing to grow strongly in non OECD countries.
What's that got to do with the price of platinum? Though not nearly as widely held as gold, the metal enjoys some of the same characteristics, in that it is extensively used in jewellery and there is steady, if unspectacular, investment demand for it.
But it has historically failed to command the same totemic status as gold as an alternative form of money, or as insurance against collapse in the global monetary order – a tail risk that seems to grow bigger by the day.
On the other hand, it does have an industrial use, catalytic converters, and that's where the lion's share of the demand comes from. These convert harmful emissions from ICE vehicles into less harmful ones.
When Western governments announced timelines for going all electric, it was therefore widely assumed that this also sounded the death knell for platinum.
Once upon a time, the metal enjoyed near price parity with gold, but over the past decade, it has lagged ever further behind, and now stands at close to a record discount of more than $2,000 (£1,474) per ounce.
Corecam, a Zurich-based wealth management firm, thinks it has spotted an opportunity. In recent analysis, the firm points out that platinum prices are now near or below the cost of production for many South African miners, where 80pc of the global platinum supply originates.
Most producers are struggling to break even, a predicament that historically marks the cyclical bottom in commodity markets. Hardly any investment has flowed into new sources of platinum production in recent years.
Now consider the following. Despite the incentives offered, EVs have failed to achieve the market penetration expected of them. Range limitation, basic lack of charging point infrastructure, and of course still relatively high prices have been a turn-off for consumers.
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The Independent
7 hours ago
- The Independent
Flightpath shuffle: how conflict in the Middle East has reshaped air routes
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11 hours ago
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Telegraph
16 hours ago
- Telegraph
British firms being investigated for ‘helping Iran'
A number of British businesses are being investigated by the Government for potentially evading sanctions against Iran's nuclear programme, it has been reported. The Treasury has identified nine suspected breaches of Britain's rigid sanctions regime against the country. The sanctions are intended to discourage Iran's nuclear weapons programme and punish the country for violations of human rights and hostile actions against allies of the UK, such as Israel. The Office for Financial Sanctions Implementation, part of the Treasury, revealed in its annual review this week that it had opened the investigations. It did not name the companies or individuals under suspicion or investigation. The firms are understood to be under suspicion of avoiding sanctions to assist Iran with its nuclear weapons programme. A Government spokesman said: 'We are committed to ensuring that sanctions are robustly enforced, potential breaches investigated and appropriate action taken.' The OFSI does not comment on specific active cases. The Government currently sanctions around 200 organisations and individuals based in or linked to Iran because of alleged involvement in the country's nuclear weapons programme. Last year, it said it was prepared to trigger 'snapback' sanctions against Iran over nuclear deal breaches. David Lammy, the Foreign Secretary, said he would trigger a new round of sanctions against the Islamic Republic to prevent it from developing nuclear weapons. The UK remains a participant of the 2015 Joint Comprehensive Plan of Action, known as the Iran nuclear deal, and can therefore unilaterally force a return to sanctions if it considers that Iran has violated the terms of the deal. The nuclear deal was significantly weakened by the US withdrawal in 2018 under the first Donald Trump administration, although major signatories, including the UK, France and Germany, remain committed in theory. Last week, Mr Trump approved US strikes on some of Iran's most heavily fortified nuclear enrichment facilities. It followed a series of smaller strikes by Israel in the preceding days, launched by Benjamin Netanyahu, the Israeli prime minister, after he claimed that Iran had enough highly enriched uranium to produce nine atomic bombs. Sir Keir Starmer has repeatedly said that Iran ' can never have a nuclear weapon ' but called for de-escalation in the war between Iran and Israel, which lasted for 12 days before a ceasefire was brokered. The Prime Minister is understood to have received an hour's notice from the White House before the US strikes on Iran took place. The British Government quickly made clear that it had played no role in the operation.
