Author: Paul Ploumis
09 Apr 2015 Last updated at 04:10:26 GMT
(Kitco News) – HSBC Bank cut its short-term forecasts for platinum while longer-term forecasts, and palladium calls, remain unchanged.

"Our 2015 average platinum forecast lowered to USD1,237/oz from USD1,337/oz on poor investment climate,” HSBC analysts say in a research note.

"We expect a wide trading range this year for platinum of USD1,070/oz to USD1,350/oz. Platinum prices have been constrained by steep declines in the broader commodity complex, especially gold and oil, as well as a stronger USD,” they add.

Aside from a negative macro environment, platinum’s larger than expected above-ground stocks has also been a factor in lowering the metal’s price.

The analysts also note platinum’s current high correlation to gold and say that movements in the yellow metal have affected the price regardless of platinum’s fundamentals. However, the real culprit behind platinum’s weak prices lies in the hands of investors, they say.

"While these industrial precious metals should theoretically be higher given that risk assets and gold are up for the year, based off of historical correlations, weaker investment demand appears to be the catalyst in pushing prices down so far in 2015.”

Courtesy: Kitco News