Platinum prices, along with the related exchange traded fund, experienced their largest gain in over 13 months as improved conditions in Europe and China bolster demand, while large mining operations hit a 13 year low.
The ETFS Physical Platinum Shares (NYSEArca: PPLT) jumped 3.7% Thursday. Physical holdings in platinum-related ETFs hit a record 68.84 metric tons on Aug 6, with assets rising 50% so far this year. PPLT was up 1% on Friday morning.
“There are signs of improving demand and that coupled with supply concerns makes platinum very attractive,” Michael Gayed, the chief investment strategist at Pension Partners LLC, said in a Bloomberg article. “We are seeing the bullish sentiment return.”
Specifically, strong economic data shows German exports rose 0.6% in June from May while Chinese exports increased 5.1% in July year-over-year.
“Today’s strong economic data out of Europe and China is very bullish for platinum,” Adam Klopfenstein, a senior market strategist at Archer Financial Inc., said in the article.
On the demand side, China is the world’s largest platinum jewelry consumer, followed by European car manufacturers – platinum is used in auto catalysts to help reduce harmful emissions.
Global platinum production, on the other hand, declined 13% in 2012, and African mining operations will drop 1.6% this year to its lowest since 2000. Northam Platinum, which operates the world’s deepest platinum mines in South Africa, warned that strikes due to deadlocked wage talks could continue to weigh on operations.