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XPTUSD forecast for15.09.2020

2020-09-15

2020-09-15

XPTUSD forecast: Platinum will outperform goldDmitri Demidenko

Fundamental platinum price forecast for today

XPT/USD is rising much faster than XAU/USD

Happiness is quiet. Gold, being popular in the media, has been 33% up from the March lows. Platinum, however, has gained 70%. It is not surprising. When the global economy was recovering after the previous crisis, the  [XPT/USD][1] was rising 35%-60% faster than [XAU/USD][2]. History repeats. Platinum is widely used in industry, so it is going to grow on value stringer than gold, as the global industry is recovering.

According to the World Platinum Investment Council, because of the pandemic, the demand for platinum has contracted by 11% in 2020, the supply decreased by 14%. It should result in a deficit of 336,000 ounces. Earlier, the WPIC forecast a surplus of 247,000 ounces. However, as the supply dropped more than expected, also because of the reasons not related to COVID-19, and investors’ demand is higher, the forecast has been revised.

Platinum supply

Source : WPIC

The WPIC notes that, after the capital outflows from the platinum ETFs in the first quarter, the ETF platinum holding increased by 122,00 ounces in the second quarter. The demand for bars and coins increased by 133,000 ounces. The stocks held by exchanges almost doubled, having reached 291,00 ounces. A positive change in the total platinum demand allows the WPIC to revise up the forecast for the investment demand by 455,000 ounces compared to the previous gauge. Nonetheless, World Platinum Investment Council expects the indicator to shrink by 15% on an annual basis, as the ETF holdings won’t exceed those reached in late 2019.

In fact, the ETF holdings reached new all-time highs already in late August. WisdomTree gives two reasons. First, a part of investors missed out on the gold rally and tried to catch up buying a cheaper metal. Second, some [XAU/USD][2] bulls took some profits and invested in platinum.

Dynamics of ETF platinum holdings

Source : Bloomberg

The WPIG notes the increased demand for autocatalysts in China, as the Chinese economy is recovering. The forecast reads the demand will be 27% up in 2020. However, other countries won’t demand as much platinum for industrial needs. So, the total demand for platinum used automotive industry should contract by 16%.

Structure and dynamics of platinum demand

Source : WPIC

In general, the World Platinum Investment Council suggests a positive outlook for  [XPT/USD][1]. Presumably, the market deficit and the fact that the platinum is undervalued compared with gold or palladium. Furthermore, the global economy is recovering, demanding more platinum, so the platinum price should be rising. UBS also suggests the platinum price rise to $975 per ounce by late September. WisdomTree expects the price to break through the high of $1000 within the next twelve months.

Remember, my [July forecast][3] suggested the platinum price grow to $940 and $1030 per ounce in three and six months. Everything has been going according to the plan so far. I believe the investment demand and the total demand for platinum will be higher than WPIC expects. So, I expect the price to reach the above targets. I still recommend buying [XPT/USD][1] on the price falls.

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Price chart of XPTUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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  1. my.liteforex.com/trading/chart?symbol=XPTUSD&returnUrl=true
  2. my.liteforex.com/trading/chart?symbol=XAUUSD&returnUrl=true
  3. www.liteforex.com/blog/analysts-opinions/xptusd-forecast-platinum-is-to-start-rising/
  4. my.liteforex.com/?category=analysts-opinions&slug=xptusd-forecast-platinum-will-outperform-gold&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
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