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News: Platinum price set to revive, but not just yet says JP Morgan

  1. US broker JP Morgan has lowered its platinum forecast again for 2015, but is bullish longer term saying that it is a question of when rather than if prices will rise.

    The timing of the call will be determined by the direction of the dollar and US interest rates, available stocks of metal in the market and the global macro economic outlook, the US broker said.

    Prices should rise to reflect the cash-strapped situation of South Africa’s mines and long-term primary supply economics.

    Mine supply will, without doubt, be constrained in the future by low future investment and production disruptions due to labour and safety issues.

    Demand for platinum and its associated metals meanwhile should grow with the 3% (2.7%) forecast by the global economy and increasingly widespread and stringent vehicle exhaust emissions legislation.

    If investor interest picks up as well, eventually the metal’s price appreciation may be “accelerated and amplified.”

    Consequently, the broker expects all PGM prices - platinum, palladium and rhodium - to rise later this year.

     

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