A worker puts an ingot of platinum into a box at the Krastsvetmet nonferrous metal plant in the Siberian city of Krasnoyarsk. Picture: REUTERS/ILYA NAYMUSHIN
A worker puts an ingot of platinum into a box at the Krastsvetmet nonferrous metal plant in the Siberian city of Krasnoyarsk. Picture: REUTERS/ILYA NAYMUSHIN

Bengaluru — Platinum prices soared to their highest in nearly six-and-a-half years on Tuesday, fuelled by the expectation that a rebound in the global economy would stoke demand for the metal used in autocatalysts.

Platinum, used in catalytic converters for vehicles, was up 2.3% at $1,333.02/oz by 3.35am GMT, but off the high of $1,336.50, its best level since September 2014.

“Green energy encouragement ... all this infrastructure reflation kind of mood and the weaker dollar narrative” were among the factors driving prices, said Stephen Innes, chief global market strategist at financial services firm Axi.

US President Joe Biden plans to invest heavily in infrastructure after his $1.9-trillion Covid-19 aid package is passed. Supply disruptions in top producer SA, a recovery in car sales and stricter emission regulations are also boosting prices, analysts said.

“With China implementing Phase 6 standard for both petrol and diesel vehicles from January 2021, PGM [platinum group metal] loadings will be strong,” said Soni Kumari, a commodity strategist with ANZ. “Higher loadings will translate into a stronger demand growth for autocatalysts than auto sales. However, she said, “a swift recovery in mine supply and restart of Anglo’s smelter to refine the stockpile of unprocessed platinum could pause this rally”.

If supplies take longer to return to normal levels, prices could soon hit $1,400, she said.

Palladium climbed 0.6% to $2,401.70, having earlier hit a one-month peak of $2,421.68. Spot gold rose 0.3% to $1,824.02/oz as the dollar eased against rivals.

US gold futures added 0.1% to $1,824.10, while silver gained 0.9% to $27.84. Limiting bullion’s gains, benchmark US treasury yields rose to their highest levels since March.

“Provided the 10-year yields stay below 1.5%, markets are still willing to ride the inflation narrative and that is quite supportive for gold,” Innes said.

Minutes of the Federal Reserve’s end-January monetary policy meeting is due on Wednesday.

Reuters

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