Precious Metal Market News (28 June 2024) | Platinum, Palladium Prices Are Volatile Right Now – Here’s What the Experts Are Saying.

 

Breaking Precious Metal Market News | Platinum, Palladium Prices Remain Highly Volatile

Platinum prices have been volatile this month. The metal ($+8.81) sits at $1,004.99/oz this morning, and platinum bulls are likely pushing to establish a degree of support at $1,000 by market close. On the month, platinum price-action has been volatile and unpredictable. The metal peaked at a monthly high of $1,064.95 on May 28th and has not reached those heights since. The key battle for platinum bulls is still at the $1,000 level. Since May 28th, platinum prices have spent a total of only nine days above $1,000 at market close. 

Volatility is also a recent fixture of the palladium (+$48.72) market. The metal is up nearly $49 on the day and is on track to close above $1,000 for the first time in over one month. With a monthly low of $890.25 and a high of $985.10, palladium price-action has been both volatile and unpredictable. Like platinum, palladium is down significantly since the beginning of 2024. 

A deficit in 2024 is projected for both platinum and palladium. Experts claim that automotive industry stockpiles of the metals, which are key to the production of energy efficient catalytic converters, may be behind the incongruency of supply-demand dynamics and price-action. 

Palladium bulls face a particularly strong obstacle as they attempt to establish a support at $1,000 for the industrious metal. A major palladium mine in the United States is considering closer because of the metal’s historic long-term losses since the 2022 peak. After hitting an all-time high in 2022, palladium is down around 70%. The closure of a key mine could make the palladium market even more volatile heading into H2 of 2024. 

What’s Driving Volatility in Platinum-Group Metal Markets?

There are a few different reasons why platinum-group metals are particularly volatile compared to other precious metal markets. 

Front Month Metals ATM Implied Volatility: Gold, Silver, Platinum, Palladium, Copper #metals June 14, 2024#COMEX #OG 0 = Gold Options (Front Month)#COMEX #SO 0 = Silver Options (Front Month)#NYMEX #PAO 0 = Palladium Options (Front Month) pic.twitter.com/lX1rUe1f25

— CommodityVol.com (@CommodityImpVol) June 16, 2024

First, platinum and palladium are often used interchangeably in the production of catalytic converters, which makes up the bulk of industrial demand for both metals. Demand and cost efficiency help determine which of the two metals automotive manufacturers choose to emphasize during a given production cycle. When the price of one metal increases, demand spikes for the other, cheaper metal. The result is that neither precious metal typically becomes significant more expensive than the other. 

Platinum-group metals also suffer from the same volatility concerns that influence the other precious metal markets. Speculation from investors surrounding interest rates, geopolitical instability, and economic insecurity can drive prices up for one or both metals. Future price trends can be harder to predict for platinum-group metals because of how much of their demand is derived from industry. 

Finally, catalytic converters are only used in petroleum-fueled vehicles. The increasing global demand for electric vehicles has been behind cooling prices for platinum and palladium, two metals that play only a minimal role in the production of non-gasoline vehicles. 

Major Palladium Mine Considers Closure – Impacts and Analysis

Amid falling prices, a major palladium mine in Montana is considering shutting down operations. The mine, owned and operated by South African mining conglomerate Sibanye Stillwater, was acquired in 2017 and has been a primary producer of both palladium and platinum in Montana since opening. Sibanye Stillwater CEO Neal Froneman cited declining palladium prices as a reason for the potential closure: 

If palladium prices do not recover, we will have to cease operations at the Montana palladium mine.

The expected suspension of operations at the Montana palladium mine may be behind the metal’s recent price-action. If the closure is finalized, expect more volatility in the palladium and platinum markets. Sibanye Stillwater’s mines in Montana produce both metals, although Froneman assured reporters that tother major Sibanye Stillwater mining operations are not under threat:

The future of Sibanye Stillwater is still balanced.

In addition to dealing a major blow to Montana’s massive mining industry, the closure of Sibanye Stillwater’s palladium mine would have a near-immediate effect on palladium prices. As record-breaking demand for electric vehicles continues to deal blows to the supply-demand fundamentals of platinum-group metals, similar closures are not unlikely – and recent volatility may be here to stay.