NEW YORK (Commodity Online): Having been the darling of the precious metal markets in the years to 2010, palladium fell out of favour in 2011 as automobile sales across the developing world slowed in response to tighter monetary conditions and the deteriorating economic environment brought about by the crisis in Europe, said Natixis Commodity Markets Limited in a Q1 2012 Metals Review.
According to Natixis, in 2012, as policy stances gradually shift from anti-inflation to pro-growth, so a recovery in automobile production should once again propel palladium prices higher, particularly if sales of palladium from Russian stockpiles continue to decline.
“We forecast that palladium prices will recover to an average of $750/oz in 2012. Platinum prices underperformed significantly in 2011, as the world’s largest market for diesel-powered vehicles came under significant pressure from Europe’s economic crisis,” Natixis added.
This has taken platinum to multi-decade lows versus gold prices. While the economic situation in Europe is unlikely to improve any time soon, this nevertheless offers an excellent opportunity which both investment demand and jewellery demand would be expected to take advantage of.
“We expect platinum prices to recover versus gold prices in 2012, and forecast an average of $1,650/oz over the year as a whole.”
