Latest news with #MetalsFocus
Yahoo
03-07-2025
- Business
- Yahoo
Analysis-Platinum prices have limited upside after June's stellar rally
By Polina Devitt and Anushree Mukherjee LONDON (Reuters) -Platinum prices have limited room to rise further after a record quarterly rally, analysts and traders said, with Chinese imports expected to soften and South African output to recover against a backdrop of still-muted auto sector demand. Prices of the metal surged 36% in the second quarter as a rise in Chinese imports and a drop in supply from major producer South Africa followed earlier heavy flows into NYMEX exchange stocks on fears platinum would be hit by U.S. import tariffs. In June alone, prices jumped 28% as hedge funds and speculative traders piled in, notching their strongest month since 1986 and hitting an 11-year high of $1,432.6 an ounce. "Platinum has broken out of a decade-long range, and, in doing so, has put itself on the radar of professional and retail investors alike who now think 'Hey, this is really undervalued fundamentally'," said Tai Wong, an independent metals trader. "But there has been a lot of volatility at the highs, and the market will want to see bigger demand from China and/or exchange-traded funds for a sustained move higher," he added. After strong deliveries of platinum to NYMEX stockpiles between December and March on fears the metal would be hit by April's reciprocal U.S. tariffs, tight near-term availability led lease rates to spike, forcing industrial users to buy instead of borrow. While platinum group metals were eventually excluded from the April tariffs, another probe ordered by Trump in mid-April into potential new tariffs on all U.S. critical minerals imports meant uncertainty continued. Meanwhile, data from the world's largest PGMs producer South Africa showed mined output of the metals fell 24% in April, capping what Morgan Stanley referred to as "exceptionally weak" production data for the first four months of 2025. China's platinum imports were also strong in the quarter, at 10 metric tons in April and 10.5 tons in May. That followed research from industry group WPIC showing Chinese platinum jewellery fabrication rose 26% in the first quarter. Put together, those factors made up "an explosive mixture for higher prices", one trader said. BULLS RUNNING OUT OF PUFF But explosions tend to be short-lived, and analysts question whether there is enough underlying support to sustain a stronger rally. Metals Focus sees the global platinum market in a deficit of 529,000 ounces this year, but the resulting reduction in above-ground stocks will still leave them at 9.2 million ounces, equal to 14 months of demand - a fairly comfortable buffer. While uncertainty over U.S. trade policy on platinum lingers, raising import tariffs for the metal would ultimately be counterintuitive, says Wilma Swarts, director of PGMs at Metals Focus, as North American supply falls short of the region's demand. Platinum lease rates, which touched 22.7% in June, have since fallen back to 11.6%. Mine supply in South Africa meanwhile is expected to show signs of recovery in the second half, with overall global mined output seen down just 6% in the year as a whole. "There were definitely some challenges with the rains, power and water disruptions in southern Africa between January and March, but nothing major or out of ordinary," said Johan Theron, spokesperson for Impala Platinum. And strength in physical demand for platinum in China only lasted until prices topped $1,050 in early June, according to one trader. China's June import data, due on July 20, is expected to show a decline after very strong platinum deliveries in the previous two months. That leaves the platinum market vulnerable to one of the last decade's most bearish factors - waning demand from the auto sector, which uses the metal as a component in catalytic converters for combustion-engine cars. CAR TROUBLE Long-term pressure on the platinum group metals from the expansion of electric vehicles persists, while global trade disputes have further dampened the auto sector's mid-term outlook. Auto production forecasters have removed as much as 10 million units from production projections over the next four years, and lower vehicle production will lead to weaker PGMs demand, Metals Focus said. The consultancy is forecasting auto sector platinum demand to decline by 2% this year after a 3% fall last year. Nornickel, the world's largest palladium producer, says any further rise in platinum prices could lead catalyst producers towards more substitution of the metal for palladium. Price spreads between the two metals of more than 30% would encourage that, it said. Platinum was 22% more expensive than palladium on Thursday. But while analysts and traders are cautious about further gains in platinum prices, they are not expecting them to correct. StoneX analyst Rhona O'Connell said some of China's high April-May platinum imports could be in part a bargain-hunting exercise. "China is renowned for buying material that is out of favour," she said. "And although the electrification of the vehicle fleet is advancing apace, the internal combustion engines and the diesel sector are still in place." Analysts see prices stabilising at levels above those seen before the rally, supporting miners' margins as the market heads for a third year of structural deficit.
Yahoo
03-07-2025
- Business
- Yahoo
Analysis-Platinum prices have limited upside after June's stellar rally
By Polina Devitt and Anushree Mukherjee LONDON (Reuters) -Platinum prices have limited room to rise further after a record quarterly rally, analysts and traders said, with Chinese imports expected to soften and South African output to recover against a backdrop of still-muted auto sector demand. Prices of the metal surged 36% in the second quarter as a rise in Chinese imports and a drop in supply from major producer South Africa followed earlier heavy flows into NYMEX exchange stocks on fears platinum would be hit by U.S. import tariffs. In June alone, prices jumped 28% as hedge funds and speculative traders piled in, notching their strongest month since 1986 and hitting an 11-year high of $1,432.6 an ounce. "Platinum has broken out of a decade-long range, and, in doing so, has put itself on the radar of professional and retail investors alike who now think 'Hey, this is really undervalued fundamentally'," said Tai Wong, an independent metals trader. "But there has been a lot of volatility at the highs, and the market will want to see bigger demand from China and/or exchange-traded funds for a sustained move higher," he added. After strong deliveries of platinum to NYMEX stockpiles between December and March on fears the metal would be hit by April's reciprocal U.S. tariffs, tight near-term availability led lease rates to spike, forcing industrial users to buy instead of borrow. While platinum group metals were eventually excluded from the April tariffs, another probe ordered by Trump in mid-April into potential new tariffs on all U.S. critical minerals imports meant uncertainty continued. Meanwhile, data from the world's largest PGMs producer South Africa showed mined output of the metals fell 24% in April, capping what Morgan Stanley referred to as "exceptionally weak" production data for the first four months of 2025. China's platinum imports were also strong in the quarter, at 10 metric tons in April and 10.5 tons in May. That followed research from industry group WPIC showing Chinese platinum jewellery fabrication rose 26% in the first quarter. Put together, those factors made up "an explosive mixture for higher prices", one trader said. BULLS RUNNING OUT OF PUFF But explosions tend to be short-lived, and analysts question whether there is enough underlying support to sustain a stronger rally. Metals Focus sees the global platinum market in a deficit of 529,000 ounces this year, but the resulting reduction in above-ground stocks will still leave them at 9.2 million ounces, equal to 14 months of demand - a fairly comfortable buffer. While uncertainty over U.S. trade policy on platinum lingers, raising import tariffs for the metal would ultimately be counterintuitive, says Wilma Swarts, director of PGMs at Metals Focus, as North American supply falls short of the region's demand. Platinum lease rates, which touched 22.7% in June, have since fallen back to 11.6%. Mine supply in South Africa meanwhile is expected to show signs of recovery in the second half, with overall global mined output seen down just 6% in the year as a whole. "There were definitely some challenges with the rains, power and water disruptions in southern Africa between January and March, but nothing major or out of ordinary," said Johan Theron, spokesperson for Impala Platinum. And strength in physical demand for platinum in China only lasted until prices topped $1,050 in early June, according to one trader. China's June import data, due on July 20, is expected to show a decline after very strong platinum deliveries in the previous two months. That leaves the platinum market vulnerable to one of the last decade's most bearish factors - waning demand from the auto sector, which uses the metal as a component in catalytic converters for combustion-engine cars. CAR TROUBLE Long-term pressure on the platinum group metals from the expansion of electric vehicles persists, while global trade disputes have further dampened the auto sector's mid-term outlook. Auto production forecasters have removed as much as 10 million units from production projections over the next four years, and lower vehicle production will lead to weaker PGMs demand, Metals Focus said. The consultancy is forecasting auto sector platinum demand to decline by 2% this year after a 3% fall last year. Nornickel, the world's largest palladium producer, says any further rise in platinum prices could lead catalyst producers towards more substitution of the metal for palladium. Price spreads between the two metals of more than 30% would encourage that, it said. Platinum was 22% more expensive than palladium on Thursday. But while analysts and traders are cautious about further gains in platinum prices, they are not expecting them to correct. StoneX analyst Rhona O'Connell said some of China's high April-May platinum imports could be in part a bargain-hunting exercise. "China is renowned for buying material that is out of favour," she said. "And although the electrification of the vehicle fleet is advancing apace, the internal combustion engines and the diesel sector are still in place." Analysts see prices stabilising at levels above those seen before the rally, supporting miners' margins as the market heads for a third year of structural deficit.
Business Times
29-06-2025
- Business
- Business Times
Americans cash out on gold coins as Asian investors bulk up
Americans who once snapped up gold bars and coins are offloading the assets while their Asian counterparts show no letup in bullion buying, a sign that investors on opposite sides of the world have different outlooks on the global economy. The divergence suggests US residents who stash bars and coins at home or in safe deposit boxes – akin to stock market day traders – are more at ease about US President Donald Trump's tariffs, rising government debt and geopolitical tensions. And, they're ready to cash in after the metal's stunning rally over the past two years. Known as retail investors, these Americans are bucking broader market trends in which more wealthy investors continue to aggressively buy the haven asset as do sovereign funds and central banks. Meanwhile, Asian gold buyers are eschewing jewellery for bars and coins. In the US, 'a lot of the retail investors tend to be Republican-leaning. And whatever we say about the policy of tariffs, they like the idea of how Trump's doing', said Philip Newman, managing director at research consultancy Metals Focus. 'So from their point of view, there's less reason to buy gold.' The US market is so awash with bars and coins that some precious metals dealers have slashed their premiums to the lowest in six years to spur sales. And when investors sell, they're now looking at paying dealers a fee to offload gold. Bullion dealer Money Metals Exchange currently charges buyers of one-ounce American Eagle gold coins US$20 over spot prices, compared with US$175 four years ago. And sellers now need to pay about US$20 for the online exchange to take the metal, whereas in 2021 they would have received an extra US$121 for selling. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The glut has led to a collapse in sales of newly minted bullion products, with the US Mint's American Eagle gold coins – a proxy for retail demand – tumbling more than 70 per cent in May from the prior year. The demand for gold bars and coins has been falling for the past three years in North America and Western Europe while rising everywhere else in the world, with last year marking the biggest divergence on record in data going back to 2014, according to Metals Focus. That gap continued into the first quarter of 2025, driven predominately by the selloff in the US market, according to the consultancy. Meanwhile, demand for bars and coins rose 3 per cent in the Asia-Pacific region in the first quarter, with the Chinese market registering a 12 per cent year-on-year increase, according to the latest data from the World Gold Council, a trade body representing gold miners. South Korea, Singapore, Malaysia and Indonesia all posted gains of more than 30 per cent. Initial worries of China and Asia getting hit the hardest by Trump's tariffs led to 'super strong' demand for gold in the region, said Kenny Hu, a commodity strategist at Citigroup. Concerns about local currency depreciation also means gold remains the go-to asset for Asian investors who played a key role in the metal's rally since 2024. Investors in South-east Asia lacking other investment options have started recognising gold as a strategic asset, said Brian Lan, managing director of GoldSilver Central, a Singapore-based precious metals dealer. 'South-east Asians who have memories of the war understand that gold is a form of insurance during periods of uncertainty,' he said. In the US, profit taking is part of the equation given gold's stunning climb – up 59 per cent since the beginning of 2024 to US$3,274.33 an ounce last Friday (Jun 27). But Wall Street banks are split over whether the rally has ended. Goldman Sachs reaffirmed a US$4,000-an-ounce forecast by next year and Morgan Stanley expects US$3,800 by the end of this year, while Citigroup sees prices dipping below US$3,000 next year. 'When there's fear, they own more gold and less risk assets,' said Hu of Citigroup. 'And now maybe they're thinking things are actually fine. Tariffs are not that bad. Things will get negotiated out. Geopolitics eventually will de-escalate and US growth may be not that bad.' BLOOMBERG
Yahoo
28-06-2025
- Business
- Yahoo
Americans Cash Out on Gold Coins as Asian Investors Bulk Up
(Bloomberg) -- Americans who once snapped up gold bars and coins are offloading the assets while their Asian counterparts show no letup in bullion buying, a sign investors on opposite sides of the world have different outlooks on the global economy. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Sprawl Is Still Not the Answer Mapping the Architectural History of New York's Chinatown The divergence suggests US residents who stash bars and coins at home or in safe deposit boxes — akin to stock market day traders — are more at ease about US President Donald Trump's tariffs, rising government debt and geopolitical tensions. And, they're ready to cash in after the metal's stunning rally over the past two years. Known as retail investors, these Americans are bucking broader market trends in which more wealthy investors continue to aggressively buy the haven asset as do sovereign funds and central banks. Meanwhile, Asian gold buyers are eschewing jewelry for bars and coins. In the US, 'A lot of the retail investors tend to be Republican-leaning. And whatever we say about the policy of tariffs, they like the idea of how Trump's doing,' said Philip Newman, managing director at research consultancy Metals Focus Ltd. 'So from their point of view, there's less reason to buy gold.' The US market is so awash with bars and coins that some precious metals dealers have slashed their premiums to the lowest in six years to spur sales. And when investors sell, they're now looking at paying dealers a fee to offload gold. Bullion dealer Money Metals Exchange LLC currently charges buyers of one-ounce American Eagle gold coins $20 over spot prices, compared with $175 four years ago. And sellers now need to pay about $20 for the online exchange to take the metal, whereas in 2021 they would have received an extra $121 for selling. The glut has led to a collapse in sales of newly minted bullion products, with the US Mint's American Eagle gold coins — a proxy for retail demand — tumbling more than 70% in May from the prior year. The demand for gold bars and coins has been falling for the past three years in North America and Western Europe while rising everywhere else in the world, with last year marking the biggest divergence on record in data going back to 2014, according to Metals Focus. That gap continued into the first quarter of 2025, driven predominately by the selloff in the US market, according to the consultancy. Meanwhile, demand for bars and coins rose 3% in the Asia-Pacific region in the first quarter, with the Chinese market registering a 12% year-on-year increase, according to the latest data from the World Gold Council, a trade body representing gold miners. South Korea, Singapore, Malaysia and Indonesia all posted gains of more than 30%. Initial worries of China and Asia getting hit the hardest by Trump's tariffs led to 'super strong' demand for gold in the region, said Kenny Hu, a commodity strategist at Citigroup Inc. Concerns about local currency depreciation also means gold remains the go-to asset for Asian investors who played a key role in the metal's rally since 2024. Investors in Southeast Asia lacking other investment options have started recognizing gold as a strategic asset, said Brian Lan, managing director of GoldSilver Central, a Singapore-based precious metals dealer. 'Southeast Asians who have memories of the war understand that gold is a form of insurance during periods of uncertainty,' he said. In the US, profit taking is part of the equation given gold's stunning climb — up 59% since the beginning of 2024 to $3,274.33 an ounce Friday. But Wall Street banks are split over whether the rally has ended. Goldman Sachs Group Inc. reaffirmed a $4,000-an-ounce forecast by next year and Morgan Stanley expects $3,800 by the end of this year, while Citigroup Inc. sees prices dipping below $3,000 next year. 'When there's fear, they own more gold and less risk assets,' said Hu of Citigroup. 'And now maybe they're thinking things are actually fine. Tariffs are not that bad. Things will get negotiated out. Geopolitics eventually will de-escalate and US growth may be not that bad.' --With assistance from Yihui Xie. America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 ©2025 Bloomberg L.P.
Yahoo
28-06-2025
- Business
- Yahoo
Americans Cash Out on Gold Coins as Asian Investors Bulk Up
(Bloomberg) -- Americans who once snapped up gold bars and coins are offloading the assets while their Asian counterparts show no letup in bullion buying, a sign investors on opposite sides of the world have different outlooks on the global economy. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Sprawl Is Still Not the Answer Mapping the Architectural History of New York's Chinatown The divergence suggests US residents who stash bars and coins at home or in safe deposit boxes — akin to stock market day traders — are more at ease about US President Donald Trump's tariffs, rising government debt and geopolitical tensions. And, they're ready to cash in after the metal's stunning rally over the past two years. Known as retail investors, these Americans are bucking broader market trends in which more wealthy investors continue to aggressively buy the haven asset as do sovereign funds and central banks. Meanwhile, Asian gold buyers are eschewing jewelry for bars and coins. In the US, 'A lot of the retail investors tend to be Republican-leaning. And whatever we say about the policy of tariffs, they like the idea of how Trump's doing,' said Philip Newman, managing director at research consultancy Metals Focus Ltd. 'So from their point of view, there's less reason to buy gold.' The US market is so awash with bars and coins that some precious metals dealers have slashed their premiums to the lowest in six years to spur sales. And when investors sell, they're now looking at paying dealers a fee to offload gold. Bullion dealer Money Metals Exchange LLC currently charges buyers of one-ounce American Eagle gold coins $20 over spot prices, compared with $175 four years ago. And sellers now need to pay about $20 for the online exchange to take the metal, whereas in 2021 they would have received an extra $121 for selling. The glut has led to a collapse in sales of newly minted bullion products, with the US Mint's American Eagle gold coins — a proxy for retail demand — tumbling more than 70% in May from the prior year. The demand for gold bars and coins has been falling for the past three years in North America and Western Europe while rising everywhere else in the world, with last year marking the biggest divergence on record in data going back to 2014, according to Metals Focus. That gap continued into the first quarter of 2025, driven predominately by the selloff in the US market, according to the consultancy. Meanwhile, demand for bars and coins rose 3% in the Asia-Pacific region in the first quarter, with the Chinese market registering a 12% year-on-year increase, according to the latest data from the World Gold Council, a trade body representing gold miners. South Korea, Singapore, Malaysia and Indonesia all posted gains of more than 30%. Initial worries of China and Asia getting hit the hardest by Trump's tariffs led to 'super strong' demand for gold in the region, said Kenny Hu, a commodity strategist at Citigroup Inc. Concerns about local currency depreciation also means gold remains the go-to asset for Asian investors who played a key role in the metal's rally since 2024. Investors in Southeast Asia lacking other investment options have started recognizing gold as a strategic asset, said Brian Lan, managing director of GoldSilver Central, a Singapore-based precious metals dealer. 'Southeast Asians who have memories of the war understand that gold is a form of insurance during periods of uncertainty,' he said. In the US, profit taking is part of the equation given gold's stunning climb — up 59% since the beginning of 2024 to $3,274.33 an ounce Friday. But Wall Street banks are split over whether the rally has ended. Goldman Sachs Group Inc. reaffirmed a $4,000-an-ounce forecast by next year and Morgan Stanley expects $3,800 by the end of this year, while Citigroup Inc. sees prices dipping below $3,000 next year. 'When there's fear, they own more gold and less risk assets,' said Hu of Citigroup. 'And now maybe they're thinking things are actually fine. Tariffs are not that bad. Things will get negotiated out. Geopolitics eventually will de-escalate and US growth may be not that bad.' --With assistance from Yihui Xie. America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 ©2025 Bloomberg L.P. Sign in to access your portfolio
