JPMorgan Sees Divergence in S. African Gold, Platinum Stocks
Comment of the Day

December 03 2020

Commentary by Eoin Treacy

JPMorgan Sees Divergence in S. African Gold, Platinum Stocks

This article by Adelaide Changole for Bloomberg may be of interest to subscribers. Here is a section:

Prices of platinum, palladium and other platinum group metals will be supported by demand from China and other major consumers, given an increased push for energy transition, electric vehicles, and reduced emissions. Platinum and its by-product palladium are used in vehicle pollution-control devices.

Platinum companies “are very different now from gold,” Aserkoff said. “They have different drivers from gold, the price of the metals is going to change and the stock prices will behave differently. I don’t think they should be as correlated as they used to be.”

Eoin Treacy's view

Gold is monetary metal so it tends to attract people who are concerned about the sustainability of a fiat currency system. The other precious metals are also industrial resources. They tend to be held in their own right but they also have industrial utilities. Solar panels are a support for silver prices and catalytic converter demand has been a tailwind for palladium. Platinum has lacked a fundamental driver since the decline of diesel engines. That may now be changing with the evolution of a hydrogen fuel cell market. 

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