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Are PGM's the Next Story?

Thursday March 06, 2014 08:12

Gold continues to consolidate as the market awaits fresh news. The story that has been neglected over the past few days has been the blow-off in the PGM sector. Palladium is up $60 and platinum some $50 in the past few days, as the South African strike, may be having some direct effects on spot supply. The palladium sponge bid is at a $10 premium, in NY relative to Zurich, which may indicate a physical short squeeze in North America. As mentioned, last week the PGMs were expected to be in a supply deficit, this year, prior, to the South African strikes. This group has a propensity to surge to outlandish price premiums, in times of physical shortages. Look at a Rhodium chart in 2008. Yes the $10,000 print is accurate. No e-mails please, it is just an example of how a thinly supplied metal can react to a supply squeeze. The majority of PGM supply comes from South Africa and the world’s not so good friend anymore,  Russia.

By Peter Hug
Global Trading Director
Kitco Metals Inc.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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