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 quo...
A collection of information and opinions on the economy, alernative investments and investment banking as seen by a long-time foreign resident in Tokyo