(Kitco News) - As economic recovery takes hold in key industries, precious metals like platinum and palladium could be the next big movers, says Chris Gaffney, President of World Markets at EverBank.
Despite trailing gold in 2024, Gaffney believes these precious metals are set for a breakout. "Silver, platinum, and palladium are better buys right now than gold," he stated during his interview with Jeremy Szafron, Anchor at Kitco news, citing increased industrial demand and the ongoing recovery of manufacturing sectors across the globe.
Platinum and palladium are vital in reducing vehicle emissions, but their roles go beyond traditional vehicles. "Platinum and palladium are typically in a deficit position," Gaffney noted. "Even with the rise of electric vehicles, there's still strong demand for internal combustion engine vehicles, maintaining high demand for these metals."
The global transition toward greener economies, especially with tighter emission standards, keeps these metals indispensable for automotive manufacturing, particularly in catalytic converters, which remain crucial for reducing harmful emissions in both gasoline and diesel engines.
Platinum and palladium could also benefit from the ongoing Federal Reserve rate cuts, which have weakened the U.S. dollar. Gaffney emphasized that lower rates could lead to higher industrial demand, further supporting these metals: "As individuals start to take over the reins of the demand side, I think silver, platinum, and palladium will catch up," he said.
The recent 50 basis point rate cut by the Fed has bolstered industrial metals and other commodities as the U.S. dollar faces renewed pressure. With platinum and palladium already in deficit, these factors create a bullish outlook for both metals heading into the final quarter of 2024.
Geopolitics is also playing a role. Gaffney noted that "geopolitical tensions, especially in the Middle East, and uncertainties around the U.S. elections are increasing, supporting precious metals prices." If tensions escalate further, safe-haven buying could accelerate, pushing platinum, palladium, and gold higher. “The industrial recovery combined with geopolitical risks provides a unique environment for these metals to outperform,” he added.
For a deeper dive into Chris Gaffney's insights and a breakdown of the current trends in the precious metals market, watch the full interview on Kitco News.