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Zawya
04-07-2025
- Business
- Zawya
Platinum prices have limited upside after June's stellar rally
LONDON - 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. (Reporting by Polina Devitt and Anushree Mukherjee; Additional reporting by Felix Njini and Anastasia Lyrchikova; Editing by Veronica Brown and Jan Harvey)
Business Recorder
12-06-2025
- Business
- Business Recorder
Gold holds gains
NEW YORK: Gold prices rose on Wednesday, helped by cooler-than-expected inflation data that strengthened investors' conviction the Federal Reserve will start cutting interest rates by September. Spot gold was up 0.5% to $3,337.49 an ounce as of 0909 ET (1309 GMT) after rising as much as 1% earlier in the session. US gold futures rose 0.5% to $3,358.80. Data showed the Consumer Price Index increased 0.1% last month after rising 0.2% in April. In the 12 months through May, the CPI advanced 2.4% after gaining 2.3% in April. Economists polled by Reuters had forecast CPI climbing 0.2% and increasing 2.5% year-on-year. 'The surprise low print in core CPI has goosed the entire precious metals complex higher as yields and the dollar fall. The hope is that it will bring a Fed cut that much sooner,' said Tai Wong, an independent metals trader. Traders are currently pricing in a 68% chance of an interest rate cut in September by the US central bank, according to CME FedWatch tool. On the trade front, US President Donald Trump said the US deal with China is done, with Beijing to supply magnets and rare earth minerals, while the US will allow Chinese students at its colleges and universities. Trump said the deal is subject to final approval by him and President Xi Jinping. The market's focus is now on the US Producer Price Index data, due on Thursday before the Fed's June 17-18 meeting. 'The market will want to see gold and silver take out recent highs, $3,403 and $36.90 respectively, as a signal to charge higher. If we don't rally strongly on surprisingly good data, then it may signal a short-term correction,' Wong added. Spot silver eased 0.7% to $36.32 per ounce. Platinum rose 3.8% to $1,268.12, its highest level since 2021. Palladium added 1.1% to $1,072.25.
International Business Times
11-06-2025
- Business
- International Business Times
Gold Climbs on Softer Inflation Data as Fed Rate Cut Hopes Rise
A recent shift in sentiment across financial markets has offered some relief to investors who have been grappling with inflation concerns. Gold prices climbed on Wednesday after softer-than-expected U.S. inflation data weakened the case for an immediate interest rate hike. For many investors, the move comes as a breath of fresh air following weeks of uncertainty over when the Federal Reserve will take its next step. Spot gold gained 0.5% to $3,337.49 per ounce by 09:09 ET (1309 GMT), after earlier rising as much as 1%. U.S. gold futures followed suit, rising 0.5% to $3,358.80. The catalyst? A surprise U.S. Consumer Price Index (CPI) cooling in May. The CPI rose a mere 0.1% last month, lower than expected, to show a 2.4% annual increase, slightly below April's 2.5% forecast. Analysts quickly responded. "The unexpectedly soft core CPI print lifted the entire precious metals complex upward, with further help from lower Treasury yields and a weaker dollar," said independent metals trader Tai Wong. The inflation figures have fanned expectations that the U.S. Federal Reserve might finally cut interest rates, perhaps as soon as next month. The market is now pricing in a 68% chance of a September rate cut, up from less than 50% earlier. The latest developments in U.S.-China trade talks have led to positive investor sentiment. President Donald Trump announced a tentative deal with China over critical supplies, among them rare earth magnets. China is likely to deliver these items, and the U.S. will still let Chinese students attend its universities. While the day had yet to receive official confirmation from governments in both countries, the statement was read as an encouraging sign by global markets. All eyes are now on the U.S. Producer Price Index (PPI), due on Thursday. The next meeting of the Federal Reserve is scheduled for June 17–18, and the PPI numbers will continue to shape perceptions of interest rate policy. However, the overall sentiment for precious metals is still cautious. "The market wants gold and silver to penetrate key levels—$3,403 and $36.90, respectively—to trigger the continuation of a bullish trend," Wong said. "Failing to mount that in firm data could point toward a short-term pullback." Spot silver fell 0.7% to $36.32 per ounce, while other precious metals were lower too. Platinum jumped 3.8 percent to $1,268.12, a three-year high, and palladium rose 1.1 percent to $1,072.25.
New Straits Times
05-06-2025
- Business
- New Straits Times
Precious-safe-haven gold rises on weak data, simmering uncertainty
Gold rose one per cent on Wednesday, supported by a softer dollar and weak US data, as investors grappled with mounting economic and political uncertainty. Spot gold climbed 0.8 per cent to US$3,378.22 an ounce by 02:02 pm ET (1802 GMT), after rising as much as 1 per cent earlier. US gold futures settled 0.7 per cent higher at $3,399.20. The US dollar index fell 0.5 per cent, making gold cheaper for buyers holding other currencies, while benchmark US 10-year Treasury yields edged lower. "The US services sector - two-thirds of the economy - contracting for the first time in a year has goosed gold a percent higher after bullion had shrugged off a weak though historically volatile ADP employment report," said Tai Wong, an independent metals trader. "A close back above $3,400 will prime a run for new all-time highs." The Institute for Supply Management said its non-manufacturing purchasing managers index dropped to 49.9 last month, the lowest reading since June 2024, while ADP data showed US private employers added the fewest workers in over two years. "There is considerable geopolitical uncertainty with Russia-Ukraine, Iran, Syria and China driving people to buy gold... and although traders may not expect gold to rise as quickly, there is still plenty of upside," said Daniel Pavilonis, senior market strategist at RJO Futures. US President Donald Trump said his Chinese counterpart Xi Jinping was tough and "extremely hard to make a deal with", just days after accusing Beijing of violating an agreement to roll back tariffs. In addition, Washington doubled tariffs on steel and aluminum imports and urged trading partners to submit their "best offers" to avoid more import levies. All eyes are on Friday's US payrolls report for clues on the Federal Reserve's next move. Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment. Spot silver was down 0.1 per cent at US$34.45, platinum rose 1.5 per cent to US$1,089.99, while palladium lost 1 per cent to US$1,000.55.
International Business Times
29-05-2025
- Business
- International Business Times
Gold Prices Rebound as Soft Jobs Data Fuels Rate Cut Expectations
Gold prices shot up Thursday on weaker-than-expected U.S. jobless claims data and a key court ruling that struck down most of former President Donald Trump's proposed tariffs. These events have driven an increase in investor demand for gold as a safe-haven asset. Spot gold gained 0.9% to $3,319.22 an ounce by 09:37 ET (13:37 GMT), bouncing from session lows. Gold futures in the United States were flat at $3,294.60. The U.S. Labor Department said in its weekly report that initial jobless claims rose by 14,000 to a seasonally adjusted 240,000 for the week ending May 24, topping economists' forecast of 230,000. The increase indicates a potential weakening in the labor market — a factor that may impact the monetary policy plans of the Federal Reserve. "Gold is rallying on a jump in weekly initial jobless claims, which may be an early sign of a softening labor market and the market starting to price in rate cuts more rapidly by the Federal Reserve," said Tai Wong, an independent metals trader. In a parallel ruling, the U.S. Court of International Trade decided that former President Donald J. Trump had overstepped his authority when he imposed widespread tariffs under the International Emergency Economic Powers Act of 1977. However, the tariffs on auto, steel, and aluminum imports—based on Section 232 of the Trade Expansion Act of 1962—remain in place. The Trump administration said it would appeal the decision, and the case could eventually reach the Supreme Court. Analysts said while the ruling introduced new uncertainty, it wasn't fundamentally likely to change the overall trading relationship with the important partners. Investors are also looking forward to the U.S. Personal Consumption Expenditures (PCE) data, due Friday, that might offer more clues about which way inflation trends are headed and what it might mean for the Federal Reserve policy. Other precious metals also gained: silver added 0.9% to trade at $33.28 an ounce, platinum climbed 1% to $1,085.59, and palladium gained 0.6% to $968.43.
