Record Platinum, Palladium ETF Outflows Belie Price Index Bump

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PGM prices rebounded this month from being hit by the Volkswagen scandal last month, buoying the entire Global Precious Metals MMI for November. Our precious metal index hit 77 this month, a 4.1% increase from last month.

Global-Precious-Metals_Chart_November-2015_FNL

It helps that the rest of the complex did well across the board, with every single price point for platinum, palladium, and also gold and silver, appreciating across US, EU and Asian markets.

PGM Time

The US platinum price on the MetalMiner IndX ticked up considerably more than the US palladium price, almost-but-not quite proving our point from last month that “ultimately, in MetalMiner’s view, based on how investors reacted to the [VW] news, we’ll likely see both platinum and palladium trending in opposite directions in the short-to-medium term.”

Speaking of those investors, some big news in the ETF world: apparently platinum and palladium ETF outflows have approached some record lows. According to Reuters, platinum ETF holdings tracked by that news giant dropped 160,000 ounces near the end of October. Reserves of palladium ETFs were down 207,000 ounces over that same month, resulting in ETF holdings of both metals hitting their lowest since early 2014.

EconoTimes reported that just a few days ago, platinum and palladium ETF holdings were reduced by a further 31,600 ounces.

Interestingly, net-long positions, as the source reports, had risen to 13,500 contracts in that last week of October, which is itself the highest level since the beginning of July – so are we seeing investors taking a longer-term, slightly more bullish outlook? Remains to be seen.

In Economic Driver News: Fed Interest Rate Rise

The Federal Reserve recently announced that they would not raise interest rates, but it’s not ruling out a rate hike before the end of the year. Fed honchos see current economic indicators as generally favorable, which is the main reason the short-term rates have remained at near zero for the 7th year in a row.

However, as my colleague and MetalMiner’s lead forecasting analyst Raul de Frutos has pointed out, this waiting game is “generally bad news for metal prices and all commodity prices and the longer the Fed delays the more likely it is that when a rate increase does finally happen it will only make the US dollar more attractive to investors seeking yields.”

Which, of course, should bolster the dollar and, in turn, could ding at least gold prices…

Key Price Trends This Month

  • The US platinum bar price rose 8.6% from the previous month, to $984 per ounce
  • The US palladium bar price rose 3.5%, to $674 per ounce
  • The US gold bullion price rose 2.4%, to $1,141.70 per ounce

Find the rest of our Precious Metals price points from the US, EU and Asian markets on the MetalMiner IndX!

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