During the periods of uncertainty caused by the coronavirus outbreak, platinum prices decreased because of the reduced demand. Paul Wilson, CEO of the World Platinum Investment Council (WPIC), said that even though the metal has managed to recover, the growth in demand has not reflected the rise in prices. The price of the metal does not reflect the increase in the price of gold. Neither it demonstrates the ability of platinum to replace the much more expensive and poorly available palladium in the catalysts of the automotive industry, Wilson said.
A relevant indicator of the excellent health of the investment sector in physical platinum is the growth of the sales figures of coins in the US market. Wilson believes that the impact of the Covid-19 pandemic will be long-lasting. Refuge assets will continue to attract demand for a long time.
Can investors trust platinum as an asset?
Wilson thinks that the status of platinum as a precious metal will serve to push up its price, especially given the strong demand for gold in a world with higher risk. The pandemic has reduced the demand for the metal, but it also cut its supply. And the factors supporting the growth in demand for platinum, especially its use by the auto industry, are less and less dependent on the volume of vehicles sold. The increase in the number of diesel engines and the platinum load per vehicle will continue, despite the pandemic, Wilson said.
The CEO of the WPIC believes that investors can trust the metal as an asset as it offers an investment asset that resides in two critical aspects in the context of the coronavirus pandemic. These aspects are a reduced supply and the growth potential of demand. It includes investment demand, as rising global risk makes physical assets and precious metals increasingly attractive to investors