Rus News Journal

Oil and dollar will put pressure upon the market of precious metals

During the current year the prices for platinum showed strong volatilnost. Originally the platinum market has grown on 50 %, having tested a record maximum at level 2290 dollars/ ounce. However since then the prices have fallen to 25 %, and now platinum bargains below a mark 1800 dollars/ ounce. What further prospects of the market of platinum? Whether it is possible to expect rise in prices renewal, or in the nearest foreseeable future descending dynamics will remain? Answers to these questions in prepared for Quote. ru an exclusive material the strategic analyst on commodity markets Dresdner Kleinwort Peter Fertig gives.

Admittedly, faults in electric power deliveries in the republic of South Africa became a rally principal cause in the platinum market in the beginning of year. Now position was stabilised also attention of the market, seemingly, switched to the questions connected with demand. On μν6ενθώ the expert, demand for platinum decreases against two factors. “ On the one hand, economic recession in the large industrial countries and a rise in prices for oil make negative impact on motor transport sales. The greatest losses are marked in sector of off-road cars and trucks, sales of cars also do not justify expectations. Besides, cars are used longer. Demand for platinum for kataliticheskih converters thus falls, - considers P.Fertig. - On the other hand, against a rise in prices there is more attractive use of substitutes of platinum that conducts to demand displacement, as, for example, in sector of jewels. In Asia, in particular in China, bolshej jewels from a palladium, than from platinum use popularity. Therefore demand for platinum for manufacture of jewels also decreases. “

however the platinum price is defined not only balance of commercial supply and demand. “ After investors have opened for themselves the raw goods in new quality - as one more class of actives, macroeconomic factors or other markets which also have wide influence on precious metals began to play an important role. Between price dynamics of platinum and gold there is a close correlation, therefore it is no wonder that the basic fundamental factors of the market of gold explain also price movements of platinum “ - underlines P.Fertig.

Among P.Fertig`s these factors allocates a dollar exchange rate, in particular under the euro relation, and the prices for raw oil which are the indicator of inflationary pressure. “ in the beginning of year the rise in prices for oil and dollar easing, and also crisis in the financial markets and falling of stock markets have led to displacement of interest of investors from actions on the raw goods. Along with industrial losses these events too have brought the contribution to growth in the republic of South Africa in the platinum market “ - the expert believes.

Meanwhile in July strengthening of US dollar against euro and falling of the prices for oil from a record maximum in 147 dollars/ barr. Almost to 120 dollars/ barr. Have induced investors to sell the raw goods, including precious metals, marks P.Fertig. In a case with platinum more optimistic prospects on the nearest concerning electricity manufacture by the South African supplier of electric power Eskom became some months the reason of sales. Earlier faults with an electricity were a serious obstacle for platinum manufacture. Nevertheless, the analyst considers, the mining companies still have not reached a target level of production, therefore risks of faults in deliveries remain, supporting to the platinum market.

in that, as to the further prospects of the market of platinum, P.Fertig believes that “ till the end of current year the further reduction of prices on oil to level 80 dollars/ barr is expected. For mark Brent and insignificant growth next year “. Rates of strengthening of dollar against euro, probably, will be accelerated, in particular in first half 2009γ. “ These factors will put pressure upon the market of precious metals. The prices for platinum have fallen much more strongly, than we predicted in the current forecast (we correct forecasts of times in a quarter). Thus, the risk of decrease remains, and to minima of current year it is impossible to exclude falling “ - declares P.Fertig. However, as he said, platinum has suffered much more strongly, than gold: “ the Regressive analysis of annual percentage changes of the prices for these two metals shows that the current prices for platinum are much more below a regress line. It means that reaction of platinum to reduction of prices to oil and dollar strengthening can be much weaker, than gold reaction. Hence, our forecast of the price for platinum in 1750 dollars/ ounce on the end of II quarter 2009γ. Still represents a reasonable estimation, however the risk of decrease at present remains. “

department of the analytical information