Platinum Beats Gold Price at Last

So, to mark the demise of the Trillion-Dollar Coin idea, platinum just did something it's not managed in almost a year.

Its price rose above the price of gold Tuesday morning for the first time since mid-March 2012.

 

Now, comparing today's London AM Fixes for the gold price and platinum, we could offer all kinds of metal-market reasons for the switch. Platinum production, for instance, faces no end of trouble, being mostly based in South Africa. Last year's murder and strife above the Bushveld Igneous Complex knocked almost 7.5% off world annual output. Just yesterday, major producer AmPlats said it is closing two sites and selling another, cutting output by some 5% of global annual demand and putting perhaps 14,000 miners' jobs at risk.

Platinum's primary use meantime – in catalysts for petrol engines – is meantime enjoying something of a bounce back. German auto-giant VW reported on Monday that its sales rose 11% last year. Claiming that "the cyclical recovery in global auto sales that began in mid-2009 remains intact," analysts at Scotiabank now forecast "Record global car sales for 2013".

So on the best estimate (ie, Johnson Matthey's Platinum Interim Review of November), "The platinum market [was] forecast to move into a deficit of 400,000 oz in 2012. Severe disruption to platinum group metal mining is expected to reduce supplies from South Africa by over 600,000 oz. With demand firm at 8.07 million ounces and a decline in recycling, the balance of the platinum market [would] look very different to last year."

In a market of 251 tonnes, in other words – barely a pimple next to gold's 4,300 tonnes over the last 12 months – platinum supply lagged demand by 12 tonnes in 2012, some 5%.

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