Platinum prices gained for the second day on Monday lifted by broader gains in energy and industrial metals markets.
The price of platinum – used in the automotive industry – rose 0.87% to $1,030.5 an ounce on Monday. The precious metal surged by more than 4% on Friday 8 October.
Rising prices of oil, coal, and gas were signs of supply chain issues and inflation fears which was positive sentiment for commodities, including platinum, Wahyu Laksono, the founder of Jakarta-based foreign exchange trading community platform Traderindo.com, told Capital.com.
“Platinum’s rebound to above $1,000 is just matter of time,” he added.
Platinum price traded above $1,300 an ounce in mid-February as countries gradually reopened and returned to pre-pandemic life, which was bullish for metals’ demand, including platinum. As the metal is used, the automotive industry expectation that a recovery in economic means travelling would resume and new jobs were added, supporting demand for cars.
But the metal failed to maintain its gain and had been traded below $1,000 an ounce following a forecast from the World Platinum Investment Council in September of a surplus in platinum market due to supply ramp-up amid strong demand.
Analysts at ANZ Research wrote in today’s note that semiconductor producers in Asia are operating at very high levels of capacity utilisation, but the global chips shortage will nonetheless extend well into next year, adding further uncertainty to uneven recoveries.
“Add in energy shortages, and the economic landscape is materially more sober than the optimism that accompanied the early stages of global recovery,” the analysts wrote.
Global chips shortage had hampered automotive production, hitting platinum prices.