Platinum has been lackluster
Most precious metals experienced a rout in July, so investors in these metals have ended the quarter with losses. Gold has fallen approximately 1.6% on a YTD (year-to-date) basis. Silver futures, however, have seen marginal gains of 0.36%. Platinum and palladium also fell by 16.8% and 14.6%, respectively. Most expert analysts have lowered their outlook for platinum prices next year, as the metal plunged 16% in the third quarter. This is the biggest quarterly drop platinum has seen in the last seven years. Platinum, which has averaged $1,093 year-to-date, is expected to average $1,080 an ounce in 2015. Thus, the metal is expected to slip further in the coming quarter. An average price for the fourth quarter can be expected around $998 an ounce.
The Volkswagen scandal has caused platinum to be the worst-performing precious metal. Prior to the scandal, palladium was the worst performer among precious metals. However, palladium attained some buoyancy backed by the rising demand for gasoline-based cars that use palladium in their autocatalyst. Price forecasts for palladium have also fallen, though less severely.
The platinum supply continues to remain plentiful even after the five-month-long strike faced by South African miners. Demand for platinum has also been lackluster with weakness seen in the Chinese platinum jewelry demand. Chinese platinum jewelry accounts for one-fifth of global consumption.
South African miners
The South African miners continue to be in a bind as a result of the workers’ strike to attain better wages. South African mining companies like Eldorado Gold (EGO), Sibanye Gold (SBGL), and AngloGold Ashanti (AU) have lost 47.6%, 17.2%, and 12.2%, respectively, on a YTD (year-to-date) basis. These three companies make up 10.8% of the VanEck Vectors Gold Miners ETF (GDX). The VanEck Vectors Junior Gold Miners (GDXJ) precious metal indicator has fallen 10.2% on the same basis.