HardAssetsInvestor

Written by Sumit Roy  |

October 09, 2012

Platinum To Rise, Approach Parity With Gold As Strikes Cripple South African Production

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We offer our latest analysis on the precious metals market.

Gold and silver saw more of the same last week, as prices remained in their respective ranges between $1750 to $1800 and $33.50 to $35.50.

GOLD

SILVER

Though prices were largely flat, investor interest remained strong, as evidenced by gold ETF holdings, which hit a new record high at 82.6 million troy ounces.

Meanwhile, platinum hit a one-year high on Friday due to ongoing labor unrest in South Africa, the world’s largest producer of the metal.

PLATINUM

PALLADIUM

According to Bloomberg, 80,000 workers, or 16 percent of South Africa's total mine workforce, are currently on strike. Earlier this week, Anglo America Platinum fired 12,000 striking workers in a move that some analysts say could lead to an escalation of tensions and more unrest.

The company—South Africa's No. 1 platinum miner—said that strikes have led to the loss of 39,000 ounces of platinum output over the past three weeks. Last year, South Africa produced 4.855 million ounces of platinum, representing 75 percent of global production.

Platinum prices may continue higher and establish themselves above the $1725 resistance level, barring a quick resolution to the labor unrest in South Africa. We expect prices to approach parity with gold in the coming weeks near $1800.