Platinum Market Update (November 8, 2012)

Conditions in South Africa are pushing the platinum industry to serious extremes. Both officials, including the nation’s president, Jacob Zuma, and industry leaders, such as Anglo Platinum (OTC Pink:AGPPF) CEO Chris Griffith, have voiced concerns. There is talk that job cuts in the industry are likely and many are worried about the problems that could create.

Meanwhile, investors seem to be getting tired of the labor situation pushing the market around. At the beginning of October, the Anglo mine closures proved bullish for platinum. Prices flirted with $1,700 and labor issues helped support the market into the second week.

Economic concerns reappeared on the radar, however, as the International Monetary Fund issued a gloomy forecast. Data showed declining European auto sales for the month of September and the year to date. Also of significance was the news of a declining Purchasing Managers’ Index in Germany. These factors weighed on platinum prices and suggested that decreased supply may not be so problematic after all.

By Friday October 26, platinum had fallen to $1,558, a level not seen since before the announcement of QE3. While US markets were closed for the first two days of trading the following week, prices declined further. There was a bounce at the close of the month and the opening of November, when the platinum price moved to $1,578.  But although Anglo workers did not report as agreed at the end of October, the market seemed tired of factoring that into trade and platinum prices softened to $1,568 on November 7.