HSBC does not expect platinum to return to the price levels from August before the metal rose sharply on labor-related supply disruptions in South Africa. Labor unrest, which began at Lonmin and spread to other mines, enabled spot platinum to rise from around $1,390 an ounce in mid-August to $1,715.50 on Monday. The metal since fell back some $80 as of Wednesdayâs close following a Lonmin wage settlement earlier this week, although there are still reports of protests by workers at other mining companies. âBecause non-investment demand for platinum appears slack, we believe that platinum could ease further,â HSBC says. Still, âthe PGMs might not go too much further if the gold rally continues, in our view. It may be difficult for investors to sell off the PGMs in the face of gold gains, we believe, as the platinum/gold spread would likely widen and the possibility remains for a fresh outbreak of conflict in South African mines or renewed work stoppages. This leads us to believe that even if the market edges lower, platinum will stay well above the levels it traded around in August before the work stoppages began in earnest.â
By Allen Sykora of Kitco News
