What Is The Catalyst For PGMs?

May 21, 2010 | By | Reply More

Q.

It sounds like there may be a surplus of these metals. If this is the case, what is the “catalyst” for the rising prices in the metals?

A.

I like your play on words.

The ¨catalyst¨ is the current wave of optimism driving the bull market in hard and many soft commodities.

Investor psychology plays its part as this wave of optimism carries over from one commodity that is looking really good to others that may not be quite as healthy.

This is particularly true of precious metals where gold is riding high and dragging the others along by the coat tails.

However it is my view at this stage that PGMs are unlikely to run into a surplus in the foreseeable future as new uses and demand have increased steadily over an extended period and there is no reason to believe that this situation will alter detrimental.

Addressing the recycling of scrap and its consequences is quite another matter.

Paramount is the cost of collection and processing and clearly the prices of PGMs has a bearing on the profitability, or otherwise, of what in essence is a worldwide undertaking with the consequent mix of expenses.

I have a vested interest as I have money in precious metals so it is only my opinion that the bull market in PGMs along with gold (and possibly silver but that’s another story) is set to continue for quite a while yet and I am looking forward to seeing my profits in this sector substantially increase by the end of the year.

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