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Platinum Surges 12% YTD – Mine Closures Sees Supply Fall To 13 Year Low

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From GoldCore

Platinum Surges 12% YTD – Mine Closures Sees Supply Fall to 13 Year Low

Today’s AM fix was USD 1,670.00, EUR 1,234.93, and GBP 1,066.55 per ounce.
Yesterday’s AM fix was USD 1,678.00, EUR 1,240.02, and GBP 1,063.57 per ounce.

Silver is trading at $31.81/oz, €23.64/oz and £20.41/oz. Platinum is trading at $1,736.00/oz, palladium at $768.00/oz and rhodium at $1,200/oz.

 Cross Currency and Precious Metal Table – (Bloomberg)

Gold edged off $0.50 or 0.03% in New York yesterday and closed at $1,673.00/oz. Silver rose to $32.10 in London before it dropped off to $31.60, but it then bounced back higher midday and finished with a gain of 0.25%.


Platinum in Nominal USD – 1987 to Today

Gold rose 0.6% in Australian dollars after poor retail figures led to concerns about the Australian economy and outlook for the currency.

Gold slipped $2 an ounce and the drop may have been triggered by news that India's central bank would consider imposing value and quantity restrictions on gold imports by banks under “extreme conditions”. 

The world's biggest consumer of gold is battling a record high current account deficit. Rather than tackling the root cause of the problem, bankers are again tackling the symptom which is demand for gold. However, the anti gold stance and attempts to curb gold demand in India by the government is leading to some 25%of gold flows into India coming from irregular channels. A warning for anti gold and anti free market governments everywhere.

A further slide in the yen led to more buying of gold futures on the Tokyo Commodity Exchange (TOCOM), with the most active contract, currently December, hitting a record for the fifth consecutive day at 5,073 yen a gram – over 0.157 million yen per ounce.

The U.S. Mint reported their bullion coin sales figures for February. Interestingly, no gold eagles or gold buffaloes (1 ounce 24K) were sold but silver continued to be favoured by bullion buyers and the US Mint sold a substantial 675,500 of one ounce silver eagles. 

Platinum has surged another 1.5% to $1,738/oz this morning and palladium its highest since September 2011 (766.22/oz) due to increasing concerns about supply and industrial and investor demand. 


Currency Ranked Returns – In Chinese Yuan

Platinum prices have already risen by more than 12% so far in 2013, following the same advance for all of 2012.

Platinum supplies have fallen to a 13-year low as mines in South Africa, the world’s biggest producer, close and the platinum industry is in crisis due to industrial unrest, geological constraints and sharply rising costs.

Global production will drop 2.7% to 5.68 million ounces, the least since 2000, according to Barclays Plc, which raised its 2013 shortage estimate sixfold last month after Johannesburg-based Anglo American Platinum Ltd. (AMS) said it plans to idle shafts. 

Anglo American Plc’s platinum unit, the largest producer, last month proposed the halt of four mine shafts that would cut about 7% of global production.

At the same time, demand from carmakers, the biggest consumer of the metal, will increase 0.5 percent in 2013, Barclays says. 

Perhaps, most importantly investors are buying platinum at the fastest pace in three years and yet holdings of platinum remain very, very small.

Global production of the metal will fall as South African output drops 3.4% to a 12-year low of 4.11 million ounces, Barclays estimates.

“Supplies are very tight and it’s a serious situation,” said Mihir Worah, who manages $110 billion in real return strategy funds at Pacific Investment Management Co., in Newport Beach, California told Bloomberg. 

“Not only are there issues on the supply side, we could see surprises on the demand side as well.”

Concern about supply sent platinum prices above gold in recent days for the first time since April. Platinum traded above gold from December 2008 through August 2011.


Platinum in USD – 1959 to Today (Speculative-Investor.com)

There was a 394,000 ounce shortage last year as Impala Platinum Holdings Ltd. (IMP) shut its Rustenburg mine, the world’s biggest, and police killed workers striking over pay at Lonmin Plc (LMI)’s Marikana complex.

South African producers closed nine platinum mine shafts and dismissed 3,332 workers in the second half of 2012, the Department of Mineral Resources says.

Amplats, said last week it would idle four shafts and cut 400,000 ounces of platinum output a year, about 7% of global production, to restore profitability. The company said last week it would postpone that decision for as many as 60 days to allow for government and union talks.

Holdings in exchange traded-products backed by platinum expanded 1% to a record 51.5 metric tons yesterday, data compiled by Bloomberg show. 

Investors have bought more than 5 tons of platinum through exchange-traded products in January, the most in three years. 

However, the 51.5 metric tonnes owned through ETPs are worth less than $3 billion and there is the potential for allocations to rise from the tiny levels of today to much higher levels in the coming months.

Platinum remains undervalued and would have to gain another 35% just to reach the record nominal high seen in March 2008 at $2,300/oz.

Longer term , platinum’s inflation adjusted 1980 high of nearly $4,000/oz seen in 1980 is likely.

In 1980, the mining industry in South Africa, where more than 80% of supply comes from, was not in crisis. China and emerging markets were not seeing the growth of huge middle classes demanding cars with catalytic converters and global currency debasement was not taking place.

Record platinum prices are also likely as platinum is an extremely rare metal and is much rarer than gold. Today, we live in a finite natural world of geological constraints and yet we are witnessing huge population growth and near infinite money creation.

Platinum and precious metals have a negative average correlation to paper assets. Precious metals are one of the very few asset classes with a positive correlation coefficient with inflation - meaning that precious metals act as a hedge against inflation.

Real diversification remains essential in order to protect and grow wealth in 2013 and in the coming years, and platinum, like silver and palladium remains compelling from a diversification point of view.

NEWS  

Platinum Advances to Four-Month High Boosting Premium to Gold - Bloomberg

Indian government 'anti-gold' stance leads to quarter of gold flowing thru irregular channels - MSN

China Gold: "No one knows how much the central bank is buying" - Reuters

China Gold Imports From Hong Kong Climb to Record on Wealth – Business Week

Treasury Surpasses Debt Limit on First Day of Ceiling’s Suspension – The Wall Street Journal

COMMENTARY

Morgan, Turk and Embry Presentations at Virtual Silver Investment Conference - SilverSeek

Why Buy Silver? – The Market Oracle

Silver Bullion and Gresham's Law Going East – Resource Investor

China Imports Record Amount Of Gold In December On Price Drop – Zero Hedge

 

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Wed, 02/06/2013 - 09:13 | 3219503 GetZeeGold
GetZeeGold's picture

 

 

PT overtakes gold again...didn't see it coming.

 

Proves right there that gold sucks.

Wed, 02/06/2013 - 09:16 | 3219508 trav777
trav777's picture

nah, there was one guy on ZH who has repeatedly advocated a long Pt/short Au pair trade.  Some of the biggest morons on ZH even derided him for suggesting it, right before Pt went basically vertical. 

Wed, 02/06/2013 - 09:20 | 3219521 NidStyles
NidStyles's picture

Goodluck selling Pt, it's a smaller market than Silver.

Wed, 02/06/2013 - 09:22 | 3219527 GetZeeGold
GetZeeGold's picture

 

 

That's because there's less of it.....a lot less.

Wed, 02/06/2013 - 09:47 | 3219590 trav777
trav777's picture

a small fraction of the annual production of gold.  Pray for more meteorites I guess.

192 metric t vs 2500 or so for gold...Pd has similar metrics but Russia has been depleting stockpiles on that and the production is a bit more diverse.

Wed, 02/06/2013 - 11:15 | 3219955 Bicycle Repairman
Bicycle Repairman's picture

Anything.but.gold.

Wed, 02/06/2013 - 17:40 | 3221355 Ratscam
Ratscam's picture

that was the rat called scam, ratscam suggesting a risk free long PLT, short GLD futures trade three times on ZH at 150 to 200 USD discount price spread.
I limited my annual trades to 2-4 times per year, guess what, more profits less work, more worriless sleep. right now unfortunately no suggestions, although i did go long silver at 30.20.
waiting for deflation in stocks and overall markets to load up more PMs and its stocks by june, july august of this year.
my 50 cents.
thanks trav for remembering. i got bad mouthed big time.
even on ZH i feel lonely at times, i guess that,s the price of an independent mind basing its decisions on facts.

Wed, 02/06/2013 - 09:19 | 3219517 100pcDredge
100pcDredge's picture

Coin! Right?

Wed, 02/06/2013 - 09:22 | 3219526 chaartist
chaartist's picture

They need to blur sheepple minds to understand that platinum coin is the ultimate solution. So they play with the market.

Wed, 02/06/2013 - 09:20 | 3219523 Canucklehead
Canucklehead's picture

This is a little off topic...

In Canada, there was always the discussion about economics and national unity.  There were "have" provinces, and 'have not' provinces.

Until recently, Saskatchewan was deemed a "have not" province.

Well, it looks like one of the Saskatchewan boys has done good!

http://www.leaderpost.com/face+Guess+Ashley+Diana+marrying+Sask+dentist/...

http://nationalpostlife.files.wordpress.com/2013/01/guess.jpg?w=620

I could not locate a photo of the local boy, but I imagine he's got one big grin...

Wed, 02/06/2013 - 09:27 | 3219539 Shizzmoney
Shizzmoney's picture

The only retort I had from those who hated on the Trillion Dollar Coin is the fact that it was a solution that involved a PM (which most of us in ZH think is the solution to our economic currency problems).

What I found funny is the fact they could mint this coin, and thanks to the Fed and their QE CTRL-P policy, the value of platinum could of actually surpassed the USD value of the coin once the hyperinflation happens.

Wed, 02/06/2013 - 09:46 | 3219602 GetZeeGold
GetZeeGold's picture

 

 

We need a Quadrillion Dollar Coin.....and some big freakin guns to guard it.

 

Wed, 02/06/2013 - 09:29 | 3219547 JustObserving
JustObserving's picture

Central banksters were too busy focused on controlling gold and silver prices so platinum ran away.   They will fix platinum soon enough.

How can we have inflation if the Fed has only printed $3.6 trillion and is printing just $85 billion a month?

Wed, 02/06/2013 - 09:48 | 3219608 trav777
trav777's picture

have you, like...looked a fucking CHART of production for either of these metals?  It will answer your dumbass questions...

Wed, 02/06/2013 - 09:54 | 3219629 JustObserving
JustObserving's picture

With $3,6 trillion, you can buy about all the gold, silver and platinum bullion in the world.   Without manipulation, precious metals would be much, much higher.  Five years and counting in the CFTC inquiry into silver price manipulation.

Wed, 02/06/2013 - 11:48 | 3220087 trav777
trav777's picture

you're an idiot

Wed, 02/06/2013 - 09:53 | 3219627 CuriousPasserby
CuriousPasserby's picture

Since there's always a chance that gold will be called in by the government like 1933, I'm stacking platinum as well as gold and silver, just to be safe. In hyperinflation with gold confiscation, platinum would surely do well.

Oh, and I'm stacking gold in proof coin versions since those would be "numismatic" and not likely to be melted, and the safest junk silver coins would be the 1892-1916 Barber dimes, quarters, halves, since at 100 years old they would be less likely to be confiscated. Got to be ready for whatever our criminal government does!

Wed, 02/06/2013 - 10:18 | 3219717 chubbyjjfong
chubbyjjfong's picture

Re "stacking gold, silver and platinum".  I don't know who has the money to "stack" PM's.  Right now, I would consider myself lucky to "stack" shelves.  I just read the articles and admire the beauty of the shiny stuff.  I really wish it was different but alas, thats all I am able to do.

Wed, 02/06/2013 - 09:55 | 3219633 scatterbrains
scatterbrains's picture

Thinking about going long FSG  gold/equities as all the recent fed's manipulation (pushing dollar and vix down and running XLF higher) should start converging to pre pumpage zones

Wed, 02/06/2013 - 10:22 | 3219732 Platinum_Investor
Platinum_Investor's picture

What supply and demand actually matters when it comes to a metal?   Shocking !  

Wed, 02/06/2013 - 10:40 | 3219825 Lost Wages
Lost Wages's picture

Must be nice! I'm going to go cry on my silver now.

Wed, 02/06/2013 - 11:49 | 3220091 trav777
trav777's picture

cry because you have no class, like silverbugz

Wed, 02/06/2013 - 19:05 | 3221610 NumNutt
NumNutt's picture

Uh oh, looks like everyone better keep a close eye on their catalytic converters, the cost of those things are going to go thru the roof! Since catalytic converters are in fact the only reason platinum has any value, and just like Obamacare, the government requires you to have one.

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