The main drivers of the precious metal prices
The prices of gold and platinum are closely correlated, but there are certain differences between their movement. As a lot of investors are apparently paying close attention to these metals as alternative investment, I tried to summarize the main drivers behind the rising prices.
Gold:
1. Safe heaven for the US dollar holders
2. Increasing demand from Asian emerging middle class, particularly India (c. 20% of the world demand)
3. Decrease in annual production, to a large extent due to energy supply problems in South Africa
Platinum:
1. Alternative asset for equity investors (also holds for gold)
2. Increased use in environmentally-friendly technologies, for instance hybrid cars
3. Decrease in annual production, to a large extent due to energy supply problems in South Africa, which produces up to 80% of the world output
Seems like the high prices are going to be sustained for a while...
For the reference, links to gold and platinum price quotes:
http://www.gold.mitsubishi.co.jp/price/price.cfm
http://markets.ft.com/tearsheets/performance.asp?s=us@gc.1
The prices of gold and platinum are closely correlated, but there are certain differences between their movement. As a lot of investors are apparently paying close attention to these metals as alternative investment, I tried to summarize the main drivers behind the rising prices.
Gold:
1. Safe heaven for the US dollar holders
2. Increasing demand from Asian emerging middle class, particularly India (c. 20% of the world demand)
3. Decrease in annual production, to a large extent due to energy supply problems in South Africa
Platinum:
1. Alternative asset for equity investors (also holds for gold)
2. Increased use in environmentally-friendly technologies, for instance hybrid cars
3. Decrease in annual production, to a large extent due to energy supply problems in South Africa, which produces up to 80% of the world output
Seems like the high prices are going to be sustained for a while...
For the reference, links to gold and platinum price quotes:
http://www.gold.mitsubishi.co.jp/price/price.cfm
http://markets.ft.com/tearsheets/performance.asp?s=us@gc.1
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