Within the commodity space, perhaps the most bullish fundamentals belong to the Platinum Group Metals. Both platinum and palladium have similar industrial and commercial uses as well as demand growth, and both suffer from a less than secure supply.
South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March with the $1.1 billion swing due to unusual shipments of unwrought gold from the U.S. to South Africa in February and March.
There are real supply concerns for Platinum Group Metals or PGMs as laborers continue to protest for higher pay in South Africa. Laborers may demand a large pay increase while the South African producers are unable to stay profitable.
Miners’ strikes in South Africa have contributed to a significant rise in the platinum price, so much so that it is now trading at a premium of $50 to gold. Gold itself has been range-bound last week between $1,680-$1,660.