Platinum, that classic white metal, ended last week with some significant gains. Companies don’t seem worried about the old “No white after Labor Day!” advice. Comex prices for October finished Thursday at $1484, a remarkable three percent increase.
The dramatic increase partially came from traders, who saw a chance earlier this week to purchase the white metal at lower prices. In addition, precious metals futures increased when France announced possible EU sanctions against Russia. During times of political instability, precious metals rise even higher in demand, given their safe haven status.
Last week, Reuters noted buoyed profits among platinum producers: “Impala Platinum Ltd. (Implats), the No. 2 producer of the precious metal, said high prices buoyed annual profit but a power crunch in South Africa delayed its long-term production target.” The January power shortage in South Africa caused platinum and gold mines in the area to close for five days. Although the power has returned, output has lowered from previous levels as companies like Implats receive less power than usual.
Although a return to this year’s record highs of $2,290 an ounce are close to impossible, Implats’ CEO told the reporter that he sees platinum prices sticking at current levels or possibly rising a bit, rotating between $1,400 to $1,600. In current markets, however, platinum is quite the volatile metal. With decreasing demand from the automotive sector and possible declines hitting the mining industry, we don’t expect platinum to stay put at last week’s high levels. The white metal might be popular today, but fashionistas and investors alike may soon avoid white after Labor Day highs.