November 29, 2023
“Edward Sterck: Platinum on the Verge of a Historic Deficit, Price Catalysts Ready to Spark!
Edward Sterck's Platinum On Track For Record Deficit: Price Catalysts Building
Investors in the precious metal platinum are in for a real treat, with predictions suggesting that the metal is on course to record its largest deficit in history, due to factors such as increasing industrial demand and strict emissions regulations across the globe. With prices hovering around $1,000 an ounce, Edward Sterck, an analyst with BMO Capital Markets, believes there is more upside to be had for platinum in the coming months, should certain catalysts play out in investors’ favor.
The primary price catalyst for platinum is demand from the automotive industry. In Europe, where the metal is most often used due to its ability to reduce emissions, car sales have seen a steady growth that is likely to continue. This has been compounded by the fact that strict emissions regulations in countries such as China are also driving up demand. As new car owners upgrade their existing vehicles to meet new regulations, demand for the metal has naturally increased, and with it, prices have more than doubled in the past five years from around $450 an ounce in 2014.
Another key factor for platinum’s price performance is the supply/demand equation. The supply side is constrained due to the fact that the metal is sourced from just two nations—South Africa and Russia—with the majority of production coming from South Africa. This fact, coupled with increasing demand, has led to the record deficit that Mr. Sterck has predicted.
With these factors in play, investors should pay close attention to the developments in the platinum markets and the price movements that result. Near-term catalysts, such as the increasing demand from the automotive industry and the record deficit, should continue to improve prices and provide a strong return on investment.