A global commodities expert says palladium prices look set to rise over the next two years, and platinum could start behaving more like gold and less like an industrial metal due to Chinese jewellery demand. Leon Westgate from Standard Bank, London was speaking at a recent seminar organised by online precious metals trader, GoldMoney.
Martyn White, Head of European Business Development, GoldMoney hosted the event which was aimed at giving potential investors and their intermediaries insight into what is driving the markets.
Supply is very regional, said Leon Westgate, "Russia dominates global palladium supplies and the Ukraine situation is causing some concern there. Meanwhile, South Africa dominates platinum mining and with the mine strikes we have already lost around 7% of the global annual output. The interesting fact is that prices have not moved much despite these supply concerns and that tallies with our conclusions that there was more above ground stocks than had been estimated. However we expect both markets to remain tight and in particular palladium prices could rise in the next two years."
Guests heard how the two metals are traded differently to gold as they are seen as semi-industrial. "Palladium in particular is used in the auto-catalyst industry which uses around 65% of stocks and jewellery demand is still relatively small. Platinum however, although also used in industry, has a larger percentage going to jewellery, around 30%. We expect the demand from China for platinum in jewellery to increase and this will mean the platinum market will start behaving more like gold."
In answer to a question from the audience with regard to a precious metals portfolio, Leon Westgate said: "Including some silver, platinum and palladium is a way of getting industrial exposure without having to get your hands dirty with industrial metals."
Gold, Silver, Platinum and Palladium can all be bought online through GoldMoney. The Jersey based company has 22,000 customers worldwide and manages $1.4billion of precious metals in its partner storage vaults in five different countries. All the investment grade physical metals are regularly audited and fully allocated to customer holdings.
NOTES TO EDITOR
GoldMoney is one of the world's leading providers of physical gold, silver, platinum and palladium for retail and corporate customers. Customers can trade and store precious metal online easily and securely, 24 hours a day.
GoldMoney stores around $1.4billion of precious metals worldwide for over 22,000 customers.
GoldMoney has offices in London, Jersey and Hong Kong. It offers its customers storage facilities in Canada, Hong Kong, Singapore, Switzerland and the UK provided by the leading non-bank vault operators Brink's, Via Mat, Malca-Amit, G4S and Rhenus Logistics.
Historically gold has been an excellent way to preserve purchasing power over long periods of time. For example, today it takes almost the same amount of gold to buy a barrel of crude oil as it did 60 years ago which is in stark contrast to the price of oil in terms of national currencies such as the US dollar.
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