SHANGHAI, Mar. 17 (SMM) – The Japanese automobile, electronics, petroleum and chemical industries have halted production due to power outages following a 9.0 magnitude earthquake which hit northeast Japan on March 11th, 2011. In this context, SMM believes that prices of silver and platinum will face downward pressure in the short term.
Since March 11th, silver futures contract prices for May delivery on the Comex slid to USD 34.12 per ounce, with declines exceeding 5%; platinum futures contract prices for April delivery on the Comex lost to USD 1,690 per ounce, down as much as 5.31%; palladium futures contract prices for June delivery on the Comex dropped to USD 705 per ounce, with declines briefly exceeding 8%.
According to SMM sources, domestic downstream producers haven’t been negatively affected so far. However, the news of large-scale production suspension in Japan will reduce demand expectations on silver, platinum. Hence, prices will face corrections, but the negative impact will be short-lived. Prices of silver and platinum will be on an upward track in the medium and long term, along with world’s economic recovery.
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