Platinum Markets-Brace for Uncertainty, Keep Door Open for Opportunity

by Aran Murphy

The market-makers wondered aloud at the end of 2016: Which way will our economy turn with new policy makers in Washington? Will our national debt become difficult to service with higher interest rates? Will our unfunded pension liabilities force broad-scale local bankruptcies? Or will we pull the government back, liberate our taxpayers and traders, and allow our entrepreneurial base to do what it does best?

A consensus emerged in December that our days of forestalling hard debt and demographic-driven choices are limited. Many worry that it is too late, or that the incoming President is too politically inexperienced to put our national finances back on track. Others think – with the recently elected – we may see tremendous opportunity to re-establish growth and loose our economic fetters. From bonds to stocks to more pure measures of market volatility, President-elect Trump continues to bring opposing views out after long years of – what many will consider stagnating – policy consensus.

After the US elections, stock market indices took off. The bond markets tumbled. The Federal Reserve Bank raising rates didn’t help bonds, of course. Gold, silver and platinum prices eased as the world creeps out from under the Sword of Damocles that has long been the official policy of zero interest rates(One can’t have functioning capital markets when central banks are pricing capital at zero). The markets overall seem tentative about what direction, economically, the US should expect. Will the US experience crisis, or will it find the real growth in incomes and economic opportunity that has eluded us for the past 12 years? Continue reading Platinum Markets-Brace for Uncertainty, Keep Door Open for Opportunity


Platinum & Palladium Shortages Will Drive Prices.

The West has very little platinum or palladium. Only 5% of the global supply is produced in North America. World production of Platinum Group Metals is geographically concentrated: 88% of world platinum production is in South Africa and Russia (Russia 13%, Zimbabwe 5%, North America 5%); 80% of world palladium production is in Russia and South Africa.

South Africa is the largest producer of platinum in the world, with 73%-80% of known platinum reserves. Russia produces 40-50% of the world’s palladium supply (Johnson Matthey).

  • Production in South African mines is declining.
  • South African labor disputes  continue to affect supply.
  • China’s supplies of Platinum Group Metals are depleted.
  • China will increase imports from Russia.
  • Russian stock-piles are depleted.
  • Large deficits of platinum and palladium are forecast.
  • Analysts are projecting a possible ten-year supply deficit.

Continue reading Platinum & Palladium Shortages Will Drive Prices.