Catalytic converters are the primary source of demand, notably for gasoline engines.  Emerging market demand, coupled with tightening emission regulations are expected to help sustain an excess of demand over supply through 2014. Platinum has also gained some favor recently due to the recovery in Europe.  Platinum tends to be used more in diesel vehicles and Europe is the world’s largest market for diesel passenger cars.  Platinum and palladium are among the few commodities in supply deficit.  Palladium is the same price as November 2010, yet cumulative 12-month vehicle sales have increased about 17% since then.  Platinum is the same price as November 2007, despite the fact that cumulative vehicle sales have increased about 30%. Absent a shift lower in global vehicle sales, the outlook for platinum and palladium appears quite favourable in our view.

Key events to watch this week.  The FOMC statement on the 18th and potential reduction in the bond buying program will likely be the focus this week. Renewed tensions in Syria would raise attention as may the approaching US budget debate.  Data will likely take a back seat, with industrial production and CPI in the US prominent. In the EU, CPI and vehicle registrations should be highlights.

ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)