The global platinum market is currently facing significant challenges. However, UBS Global Research remains cautiously optimistic, they predicts platinum price of $1,100/oz by mid-2025. This prediction is based on several key factors, including anticipated changes in U.S. interest rates.
Key Drivers Behind the Platinum Price Prediction
One of the main drivers for this positive outlook is the expectation that the U.S. Federal Reserve will soon begin its easing cycle. Lower interest rates are likely to support real assets, including platinum. However, UBS analysts expect platinum to lag behind gold. They believe this will continue until lower rates stimulate stronger industrial activity.
Challenges and Volatility in the Platinum Market
Despite the positive long-term outlook, the platinum market remains volatile. UBS advises investors to manage downside risks carefully. Platinum’s price can fluctuate significantly due to current market conditions. As a result, a cautious approach is recommended for those investing in this precious metal.
China’s Role in the Platinum Market
China plays a crucial role in the global platinum market. The country imported over 59 metric tons of platinum in the first half of 2024, surpassing previous records. However, there were some fluctuations in demand, with June’s imports showing a slight decrease. China remains the world’s largest platinum consumer, with significant changes in its consumption patterns.
Shift in Platinum Demand in China
In recent years, there has been a notable shift in China’s platinum demand. The jewelry sector, which was once the largest consumer of platinum, has seen a sharp decline. This is due to platinum’s poor price performance compared to gold. The glass industry has now taken the lead, driven by the construction of new display-glass plants.
Conclusion
In conclusion, UBS predicts a $1,100/oz platinum price by mid-2025 reflects a cautiously optimistic outlook. While the market faces challenges, factors such as U.S. interest rate changes and China’s evolving demand will play crucial roles in shaping the future of platinum.
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