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'The stars are aligned for platinum' - ABN AMRO

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(Kitco News) - Asian jewelry demand, a lift from precious metals and a low base are some of the reasons that ABN AMRO believe platinum will head higher.

ABN AMRO published its precious metal outlook today.

The company said that the positive outlook for gold also supports platinum. Modest jewelry demand in China will rise. Demand for catalytic converters to curb emissions from internal combustion engines will carry apace. Lastly, the fuel cell technology and platinum's roll in supporting the technology will come to the fore.

"Platinum is used in hydrogen cars and the content needed exceeds what is needed in regular diesel car converters," writes ABN AMRO.

"Last but not least, platinum is the cheapest precious metal. The ratios of platinum to gold, silver and palladium are still at very low levels. In short, we are positive on platinum as we expect demand to outpace supply."

The author of the study notes that silver, platinum and palladium had a "very strong" 2020. Silver rose more than 46%, while palladium was up 26%, while platinum could only trade up 10%.

ABN AMRO warns that ETF positions are at an all-time high, and some profit-taking could result in temporary price weakness.

ABN AMRO likes silver for all the industrial uses coming to the fore, such as solar panels. The company warns that silver is wedded to gold, which is hitting a rough patch.

"The stars are aligned for gold prices, but some cracks are appearing. We still expect prices to rise in 2021 on lower US real yields and a weaker dollar. The caveat is that long gold is still a crowded trade."

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 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.