'Platinum Market Like A Ticking Time Bomb': Precious Metals MMI Dips For September
London (Sept 8) Our Global Precious Metals MMI took a slight step backward this September, coming in at a value of 85 - a 4.5% drop from the previous month's 89.
However, the latter half of the summer has been kind to the gold, silver, platinum and palladium prices we track, with the past three months representing the highest MMI values of the entire calendar year.
All four precious categories tracked by the MetalMiner IndX softened over the month of August for our September 1 reading, contributing to the overall 4-point decline.
Main Index Drivers: Platinum and Palladium Prices
In a forthcoming MetalMiner analysis, my colleague Stuart Burns will share his findings from interviewing Trevor Raymond, director of research at the World Platinum Investment Council. The main takeaway? That the platinum market is like a "ticking time bomb."
Essentially, the global platinum market has been in deficit for five years running, with mine strikes and shortfalls leading the way into a supply-side headache for the industry. Demand, meanwhile, appears robust, according to WPIC's data and quarterly reports, led by developments on the heels of Volkswagen's (OTCPK:VLKAY) diesel scandal, China and India's jewelry desires, and a potentially interesting knock-on effect from rising oil prices.
However, the investment community will likely be the prime driver of PGM price movements in the future; but whether it's a chicken-and-egg situation - rising prices spurring investment activity, or vice versa - remains to be seen.
Secondary Driver: Gold Prices
According to a recent release by Sprott Asset Management, "August marked the fourth successive month that gold prices rose in contrast to the dollar - something that has not occurred since metal peaked five years ago amidst the global financial crisis.