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Platinum has been the strongest - performing precious metal thus far this year. Prices have tested $1740/oz, levels last seen in September 2011, and continue to trade at a premium to gold.

21 Feb 2013

LONDON (Commodity Online): Given their view that demand will recover in H2 13 and that supply will come offline later in the year, Barclays believes platinum prices are likely to find more sustained support as the year evolves.

Platinum has been the strongest - performing precious metal thus far this year. Prices have tested $1740/oz, levels last seen in September 2011, and continue to trade at a premium to gold.

Like palladium, the two key risks for platinum are elevated investor interest and the fragile European demand picture. Preliminary January data suggest continued weakness in European car registrations.

Barclays’ auto analysts have revised down their European production estimates, thus our deficit has narrowed to 215koz. Both investor demand across ETPs and speculative interest have hit record highs, with Platinum ETPs at a record high of 1.85Moz and tactical positioning at 2.5Moz.

Nymex platinum net non-commercial positions as a percentage of open interest, at 69%, is just shy of the all -time high of 74%, thus, scope for additional length appears to be limited, and potential profit-taking poses downside risks to prices.

However, positioning in Comex gold has been scaled back and is close to the August lows, while Comex silver positions are at half of their peak.

Indeed, total tactical positioning across all four precious metals is a third below the high set in September 2010(and in dollar terms, a third below the high set in August 2011).

“Thus, theoretically, there is scope for additional allocation into the PGMs that previously had been placed in gold without investors being overweight the precious metals complex relative to other commodities.” the report concluded.


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