In December 2020 you could already have the feeling that when investing, the priority is to buy the most aggressive and crazy paper and make money with it, that other buyers are even crazier and pay even higher prices. We’re not talking about BASF, Covestro or Zalando, but rather underlying assets that have gotten out of hand, such as Door Dash, Tesla, Bitcoin or the upcoming IPO of Robin Hood in the USA.
The old economy such as precious metals comes across as boring. But just when some go nuts, this sector is a peek. Gold could resume its old uptrend in the coming year if inflation is in focus. Perhaps one or the other will reflect on the intrinsic value of the precious metal and prefer it to Bitcoin. But it doesn’t always have to be gold.
The platinum demand from investors has also risen rapidly this year. After a long period of stagnating or even falling prices, interest in the metal revives. The silver price rose the most – with a price gain of more than 30 percent – followed by gold and platinum with around 20 percent. After all, platinum still makes the leap into positive territory with an annual plus of four percent so far. “In particular, the demand for ETFs and the demand for platinum bars and coins increased particularly strongly this year,” says Funda Sertkaya, managing director of the precious metals trader Ophirum. The World Platinum Investment Council (WPIC) is assuming that investment demand will increase by 32 percent in 2020. This would set a new record.
Platinum raw material (price per ounce in dollars)
However, the increase in investment demand alone cannot boost the platinum price. The almost 30 percent recovery in global demand for platinum jewelry in the third quarter also helped little the price of platinum this year. The Chinese platinum jewelry market spreads hope. In 2021, demand for platinum jewelry is expected to rise by 13 percent. To the delight of investors, because that would be the first annual increase in eight years.
The automotive industry is likely to be decisive for the development of the platinum price. It recovered in the third quarter before the new lockdown and also boosted the platinum price. But the precious metal only reached a new annual high at the beginning of December. There are several reasons for a sustained increase in the coming year: “The stricter emissions standards in China for commercial vehicles and passenger cars have led to the platinum demand in the automotive sector having recently increased by almost 70 percent,” says Sertkaya. The WPIC is therefore expecting a sustained increase in global platinum demand of 24 percent from the automotive sector in the coming year.
In addition, the possibility of substituting platinum for palladium in catalysts is causing price fantasy. Since the price of platinum is around $ 1,300 per ounce below that of palladium, switching is tempting, but such a move cannot be implemented immediately. Such a technical change costs time and money. However, due to the high price difference between palladium and platinum, the WCIP expects a gradual change in gasoline engines in China and North America in the coming year. A trend that could give platinum its place in the sun among precious metals next year. In any case, there is plenty of catching up to do.
Daniel Saurenz runs the stock exchange portal Feingold Research with his team. It offers a daily market letter that you can test free of charge for 14 days. Sign in at Info@feingold-research.com or try the stock exchange service under this link out. Training days and coachings can be found NEW under feingold-academy.com