The Start of a Bull Market in Commodities The GFMS team at Thompson Reuters released their annual GFMS Platinum Group Survey 2016 (registration required) last week. In it, GFMS forecasts the platinum market will return to a small deficit in 2016 and the deficit in palladium will deepen, with the chief determinant of lowered supply for platinum being a reduction in mined metal.
"There will be little addition from new projects in the development pipeline while the headwinds of mines' reduced capital spending is expected to start to weigh," say the report's authors.
But while the supply-demand fundamentals look positive for platinum and palladium, GFMS says it is broader macroeconomic criteria that will be the primary price drivers of PGMs this year.
"The GFMS forecast sees broad support from extremely gradual U.S. monetary tightening, paving the way for higher prices in 2016, particularly for palladium."