In the past year or so, the “precious” seems to have drained out of precious metals. Prices have drifted downward and every rally has been met by more selling.
Platinum is no exception. Prices haven’t rallied, even though South African platinum miners held a strike for five months last year. South Africa holds about 80% of the world’s platinum reserves, and is responsible for roughly 75% of annual production worldwide.
Depressed by weak investment demand and oversupply, the per ounce price of platinum has sunk below $1,000 and is expected to remain less expensive than gold into 2016.
At close of market on Wednesday, platinum was at $984.00 per ounce compared to $1,096.70 for gold. The prices were taken from the charts at Kitco.com.
Although this is not the first time that the per ounce price of platinum has sunk below that of gold, Erica Rannestad, a senior analyst for the GFMS team at Thomson Reuters, said this drop might last longer than it ever has. Platinum is at a six year low, the last time it was this low was March 2009.
On Tuesday, Thomson Reuters dropped its average platinum price forecast for 2015 from $1,350 to $1,085. It revised its 2016 prediction downward as well, from $1,325 to $1,125.
Rannestad said they expect platinum prices to remain below that of gold for the rest of 2015 and throughout 2016, not topping gold again until 2017.
London based consultancy Metals Focus forecasts quicker recovery for platinum, topping gold again by the second quarter 2016.
Director Nikos Kavalis said that they, like other analysts, have been taken aback by just how low platinum has gone. “We’ve been surprised by the weakness of platinum on a number of occasions in the past year,” he said.
Other precious metals are down as well. Gold prices dropped off in July, though the decline has not been as surprising to analysts, who forecasted the metal’s price to fall in 2015.
After averaging about $1,251 in January, the price of gold has averaged $1,137.82 so far in July, a Kitco.com chart shows. It hit its lowest point on July 24, $1,080.80 an ounce. On Wednesday, the metal closed at $1,096.70 an ounce.
The price of gold is expected to increase in the fourth quarter.
Silver, which usually shadows the price of gold, also is down. Like the other precious metals, its highest monthly average, $17.09, came in January and it hit its low for the year, $14.49, in July.
The metal closed at $14.81 an ounce Wednesday.