Barclays and Johnson Matthey predict an ongoing platinum shortage through 2014, and tap platinum and palladium to both outperform gold and silver next year. The consensus of eight top analysts chosen by Bloomberg is that platinum will gain 13% to average $1,635 an ounce by this time next year, while palladium will gain 10% to average $823 an ounce. Much of this appreciation will be fueled by the need for catalytic converters by a booming auto industry. Clean air initiatives by China, which has been embarrassed by extreme levels of urban air pollution, will also play a part.
While additional labor strikes in South Africa, the world’s largest platinum producer, are likely, some analysts believe that higher prices would entice physical metal out of PGM-holding ETPs to make up the difference. Barclays expects the platinum shortage to shrink to 239,000 ounces, while the palladium shortage will only moderate to a 686,000 deficit.
For a colorful and entertaining look at platinum as an investment, check out this infographic at Visual Capitalist.