Platinum Price Gaining Ground Relative to Gold
GoldMoney News Desk | Feb 14, 2012 12:59AM ET
In recent weeks the platinum price has been benefiting from growing Asian demand and continuous power supply problems at South African mines. Since September 2011 gold has become more expensive than platinum, although since early February this price gap has been closing in platinum's favour, down from $200 to $65. This period of gold being more expensive than platinum – the longest since 1985 – continues, even though production costs in the platinum sector usually greatly exceed production cost for gold. Thus, some experts are convinced that the platinum price has great upward potential relative to gold.
According to the latest report from the German precious metals trading group Heraeus, the platinum price has benefited from continuing power supply problems at South African mines. Apparently, the South African Energy Company is not able to control the increasing power outages – although some mine workers recently stated that the current situation is not as bad as it used to be. South Africa is the world's leading platinum producer, and the world’s second largest palladium producer after Russia. The country's verified platinum reserves amount to 203.3 million troy ounces (6,323 tonnes), while its verified palladium reserves amount to 116.1 million ounces (3,611 tonnes). Moreover, estimates talk about the company's yearly income dropped from $674 million to $527 million . This morning the platinum price was trading at $1,665 per troy ounce, while the gold price was fluctuating around the $1,730 level.
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