In the interests of maintaining the fundamental long term argument for platinum and NKP the following article ratifies (although a week old) a number of things already mentioned by me and other posters.
Further, technically, if you refer to the 5 year platinum pric, you wll see it seems to have completed it's mirror image and again returned to it's long term upward trajectory following the GFC and crash in July 2008.
You will notice that platinum, because of its tight supply, responds strongly to movements in economic demand. In 2007 it moved from $1600/oz to $2200 in 3 months. The same will hold true in 2010 + when Gold has been tipped to jettison towards $3-$4000 by some. This may be 1-2 yrs away, but it shows the magnitude of potential that NKP has encapsulated in what is presently intrinsic value.
Enjoy the ride peoples - the white noise of the last few weeks is soon to become clearer i feel - watch for its neg leg up.
JOHANNESBURG (Commodity Online): Mark Bedford, director of precious metals marketing at Johnson Matthey, in an interview to Summit TV said platinum prices are set to soar in the coming days.
Talking to the TV channel, Mark Bedford said the interim review released by the Johnson Matthey forecast that the platinum market will probably end the year in surplus. “What’s happened is the demand for platinum has fallen away quite sharply in 2009. Supply has also fallen but what we’ve ended up with is the market in surplus whereby there’s actually been more supply than demand this year. That’s possibly what you might expect given the economic turmoil around the world this year.”
“Production has fallen but what you must bear in mind is the way that we measure supply is sales to the market rather than production directly. In South Africa for example supply has actually increased and the main reason for that is that companies such as Anglo Platinum refined metal at the end of 2008 that was only sold into the market in 2009 so actual underlying production in South Africa is actually down this year which is probably what you might expect.”
Other thing affecting the platinum price is the gold price in particular. It would be wrong to say that the platinum price is only affected by supply and demand fundamentals. Things such as the weak dollar in particular and the gold price do have an impact as well, and it seems that the gold price is on an endless upward trajectory at the moment. “That tends to take the platinum price with it so another important reason I think for being relatively bullish.”
“Investment demand in 2009 for example has been very strong, we have seen particularly funds going into platinum ETFs and quite a substantial increase in investment demand. In other metals such as palladium I think there’s also the sentiment that palladium is essentially cheap, and on that basis again you see this inward flow of funds into palladium vehicles for investment. Both of those two things of course have the natural effect of increasing the price”, he said.
Bedford said in terms of consumer demand that does depend to an extent on the price - but if the price stays reasonable going forward and doesn’t balloon back to $2,000 an ounce I would imagine underlying consumer demand in China will remain pretty strong. The economy there is still relatively buoyant and there is still a fair amount of disposable income and platinum jewellery over the years has proved to be a real winner in that particular consumer market. (Source: Summit TV
NKP Price at posting:
34.0¢ Sentiment: Buy Disclosure: Held
