Platinum looks inceasingly attractive at current values: ETF Securities

UNITED STATES October 22 2014 4:45 PM

NEW YORK (Scrap Register): ETF Securities estimates the marginal cost of platinum to be near $1,400 an ounce and the all in cost near $1,800 an ounce.

Platinum has declined sharply from the initial run-up on the back of the South African strikes earlier in the year, as speculative longs pared back after the labour resolution.

According to ETF Securities, platinum attractive at current values. Platinum only increased 0.2% last week closing at $1,259 an ounce.

At the end of this month, if the price is near current levels, it would be the lowest month-end price since August of 2009. Catalytic converters for emission controls are the largest source of demand for platinum and Europe is the single largest market due to its diesel engine focus.

Despite recession fears, the latest European auto registration data for September came in Friday with a solid increase of 6.4% compared to a year ago.

Since August of 2009, the euro currency has depreciated about 10% against the US dollar from $1.43, adding pressure on platinum. Platinum briefly traded below the price of gold last week for the first time since April of 2013.

Next to vehicle emission control technology, jewelry is the next most significant source of platinum demand, notably from China. When the price of platinum is near or below the price of gold, demand for platinum jewelry normally increases.