Platinum’s Time to Shine? Short Supply & Increased Demand Signal Upside Potential

There’s an intriguing mix of excitement and skepticism in the market as stock indices and gold prices reach new highs. At the same time, domestic and foreign investors remain uncertain about the Federal Reserve’s indecisive interest rate plans and its impact on the economy.In this week’s The Gold Spot, Scottsdale Bullion & Coin Founder Eric Sepanek and Precious Metals Advisor Joe Elkjer cover yet another gold price record, how the Fed is changing its fiscal approach, and why the next precious metal to boom isn’t gold or silver.Gold & Stocks Surge to New HighsInvestors saw gains across the board this week as gold and the broader stock market soared to historic levels. Gold prices hit a peak of $2,427 an ounce1 on Monday, extending an impressive rally that started months ago. The yellow precious metal did retract slightly following the results of the Fed’s hawkish meeting on Wednesday (more on this later).On Tuesday, the S&P 500 and Nasdaq Composite set new records2, and the DOW reached 40,0003 for the first time. These stock booms weren’t relegated to the US, either. In fact, 14 of the world’s 20 biggest stock markets recently hit all-time highs4.With both traditional and safe-haven assets increasing in value, it can be challenging to decipher the underlying economic conditions. Zooming out to look at the performance of all assets across a longer time frame can provide some clarity. As you can see in the chart, gold and copper are leading in global market asset performance.These metals are even far outpacing the S&P 500, betraying investors’ lack of trust in standard markets. Precious metals and other physical assets remain the investments of choice for those seeking wealth preservation and protection from an anticipated economic downturn.What’s the Fed’s Plan?The Fed kicked off the year anticipating aggressive rate cuts throughout 2024. However, worse-than-anticipated economic indicators have backed our financial czars into a corner of indecision.Fed leaders are tacitly acknowledging their failed attempt to reduce inflation. Chair Jerome Powell has called the road to recovery an unexpectedly “bumpy ride“, and Vice Chair Philip Jefferson said the slowdown in progress could be “long-lasting.”The Fed talks a lot…without saying anything.– Precious Metals Advisor Joe ElkjerThe US financial leadership kicked off the year, signaling six interest rate cuts. Within six months, that plan has been completely abandoned. The summary from the Fed’s latest meeting revealed “a lack of further progress toward the…2 percent objective.”Is Platinum an Emerging Opportunity?The unpredictability and instability of the economy are shaking loose some unique opportunities in the precious metals space. Although gold and silver have hogged the spotlight, the platinum market is undergoing some exciting developments.Platinum is an intriguing metal that is often underestimated and misunderstood by investors. It’s 30 times rarer than gold, which contributes to its impressive price performance. Instead of being mined directly, platinum is derived as a byproduct of other mining endeavors. This incidental recovery method highlights the unique challenges associated with obtaining this metal.Strained Supply & Surging DemandThe World Platinum Investment Council is projecting a massive discrepancy between platinum supply and demand. The total market deficit is expected to exceed 476,000 ounces in 2024, up from the previous estimate of 418,000 ounces. Platinum demand spans several large industries, including:Automotive industryJewelry industryChemical industryElectronics industryPetroleum industryPlatinum in the Jewelry IndustryTiffany & Co. and Cartier are the two biggest buyers of platinum in the jewelry industry. Platinum is particularly popular for rings, necklaces, and bracelets due to its unique white sheen and hypoallergenic nature.Platinum in the Automotive IndustryThe automotive industry accounts for up to 44% of platinum demand5, making it the largest buyer by far. Along with palladium and rhodium, car manufacturers rely on platinum to convert carbon monoxide into carbon dioxide via catalytic converters. The economy-wide move toward greener energy has led to a surge in demand for these converters.This demand has helped propel all three metals to impressive heights over the past five years, as demonstrated by the price graphs below:Platinum PricesPlatinum prices have grown by 120% from the low to the high.Palladium PricesPalladium prices experienced a 265% fluctuation.Rhodium PricesRhodium – a metal most people don’t even know about – has seen a whopping 1,250% fluctuation in the last five years.Could it be platinum’s time to shine? The dwindling supply and surging demand suggest that a rapid price surge could be around the corner. However, platinum is notoriously difficult to source. If any of our clients are interested in investing, they should consider acting quickly due to potential delays.“Short on supply, increased demand: Smells like upside potential.”Protect Your Wealth With Precious MetalsWith experts raising their gold price predictions and platinum’s bullish supply-demand discrepancy, precious metals are setting up for strong moves. The Fed’s failure to control inflation, the government’s continued spending spree, and the towering national debt are all driving investors to physical metals.If you’re eager to learn more about how gold and silver can help secure your wealth, claim a FREE copy of our Precious Metals Investment Guide. This comprehensive investor guide covers what you need to know before diversifying with precious metal assets.  Additional Sources   1 – https://qz.com/gold-prices-record-18514880762 – https://finance.yahoo.com/news/stock-market-today-nasdaq-sp-pop-to-records-as-wall-street-waits-for-nvidia-earnings-200120991.html3 – https://www.bloomberg.com/news/newsletters/2024-05-20/dow-jones-industrial-average-40-000-milestone-is-part-of-stock-boom 4 – https://fortune.com/2024/05/18/stock-market-rally-dow-sp500-nasdaq-nikkei-stoxx-ftse-sensex/5 – https://platinuminvestment.com/about/demand-drivers

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