Platinum Price: Slammed By A Strong Dollar, Despite Strong Demand
London (Jun 25) Platinum prices fell to their lowest levels since 2009. Despite most analysts predicting a deficit, this precious metal has done nothing but fall during the past few years. As we pointed out previously, the technicals looked nothing but bearish.
LME platinum spot price since 2012
A bearish factor could be that European car sales were rising at the slowest pace in six months in May due to buyers' concerns about unemployment and the Greek debt crisis.
On the other hand, European car registrations, a proxy for sales, rose 6.9% in April to 1.17 million units, the best April sales volume since 2009, and the US car market is the strongest since 2001. Therefore, it's tricky to blame the car market for platinum's continuous price decline.
Another factor putting the market under pressure is South African production of platinum, which accounts for more than 70% of the world's supply and has returned to levels ahead of the five-month strike in 2014.
Source: Seeking Alpha