Platinum Has Been On A Big Tear Lately

Platinum prices have been on a total tear recently, climbing about 12% in the past 30 days and 6% in the past two months.

The immediate cause appears to be labour unrest in South Africa, where a union representing the country’s top-three platinum companies has called for a nationwide strike over wages. 90,000 workers are expected to walk off the job this week. The stoppages have occurred off and on since last November, by which point production had already dropped 5% year-over-year there. Barclays’ Peter Worthington expects supplies to shrink further in 2014.

Other analysts including TD Securities Bart Melek see auto demand recovering in Europe, which will help pull global demand up 5.5% in 2014. December Euro car sales data saw the strongest growth in four years. Melek expects prices to average $US1,632/oz. in 2014 and $US1,750/oz. in 2015. Prices were trading around $US1,440 in Tuesday morning trading. Platinum is used in everything from medical technology to oil refining processes.

Here’s the price rally in chart form.

Which, to be sure, remain well below post-financial crisis highs…

But here’s the recent investor interest in platinum ETFs — near four-year highs.

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