Platinum demand slumps to 7-month low
Platinum plunged to a seven-month low as the spread of the coronavirus dents the outlook for industrial commodities, while a Federal Reserve official indicated the central bank is on course to taper stimulus.
The precious metal used in catalytic converters fell for a third day as the spread of the delta strain punctures the narrative of a rapid global recovery. China is facing a growing outbreak that’s prompted analysts to review economic growth projections, while case numbers are climbing from Tokyo to Sydney and in parts of the U.S.
The metal has tumbled more than 25% from this year’s peak in February as a computer-chip shortage curbed auto production, and increasing electric-car sales cloud the medium-to-long term consumption outlook. Investment demand also has waned, with exchange-traded funds backed by the metal platinum falling last week to the lowest since February, and money managers cutting their net-bullish bets to the lowest in almost nine months.
Platinum has come under pressure amid concerns about the delta variant and production misses by car manufacturers due to supply chain issues, said Wayne Gordon, a strategist at UBS Group AG. “The traditional headwinds for precious metals are weighing on some of these industrial precious metals, as well,” says a precious metal analyst.
Platinum demand is complex. Firstly, as a commodity, platinum is not always well understood. Is it a precious metal or is it an industrial metal? These distinctions can sometimes cause confusion. The truth is that platinum is both a precious metal and an industrial metal.
