As noted by Bloomberg News, platinum prices rallied this month to their highest level since February amidst violent labour conflicts at South Africa’s Lonmin Plc’s (LON) Marikana mine - which accounts for about 10 percent of global output - and the U.S. central bank’s announcement of a third (and perpetual) round of quantitative easing.
And now, according to the Globe and Mail, “the industrial strife hitting South Africa’s mining industry has spread to AngloGold Ashanti Ltd. (NYSE: AU, Stock Forum), the world’s third-largest bullion producer by sales.”
Because of the upheaval associated with the industry's wildcat strikes and the increasing demand for platinum, there are now fears of undersupply where surpluses had been predicted.
Analysts expect the platinum market to go into a deficit in 2013 and platinum prices are forecasted to rise to over US$2,000 per ounce by 2015, potentially higher if South Africa deteriorates further. In the long run, the market is expected to remain in deficit and such supply-side constraints would only lead to further tightening, according to KPMG Platinum Insight.
Inflation hedge drives the investment demand for platinum
Investors have accumulated record holdings of platinum assets as they seek to protect their wealth against the threat of inflation with a metal that is highly vulnerable to supply disruptions as a result of the fact that the overwhelming volume of global production comes from South Africa and other volatile jurisdictions. Platinum ETF holdings have grown considerably since the first ETFs were launched in 2007.
To view the rest of this article, please click on the link: https://www.prophecyplat.com/news_2012_0925_article_platinum.php