Platinum Rises to 3-Week High

Platinum futures rose to around $1,670 an ounce, reaching more than a three-week high as softer US inflation data offset concerns over the escalating Middle East conflict. US producer prices unexpectedly fell in June for the first time in nearly a year, and together with surprisingly soft consumer inflation, an interest rate hike this month by the Federal Reserve has been effectively ruled out. This weakened the US dollar to a one-month low, boosting demand for dollar-denominated commodities such as platinum. However, the escalation in hostilities between US and Iran kept oil prices sharply higher, maintaining pressure on the inflation outlook. Meanwhile, platinum prices continued to draw support from expectations of a fourth consecutive global supply deficit this year, as constrained South African mine output, limited recycling supply, and dwindling above-ground inventories kept the physical market tight. Industrial demand also remained resilient, supported by the automotive sector.

Platinum futures traded below $1,650 an ounce, hovering near late-November levels, pressured by broad weakness across precious metals as escalating tensions over the Strait of Hormuz revived inflation concerns. US President Donald Trump threatened additional military strikes and reinstated a US blockade against Tehran in the Strait of Hormuz, driving oil prices sharply higher. Although, he dropped plans to impose levies on cargoes transiting the Strait of Hormuz. Meanwhile, a retreat in the US dollar provided support after softer-than-expected inflation data reduced expectations for further interest rate hikes by the Federal Reserve. Addiitonally, the platinum market remained structurally tight, on track for a fourth consecutive annual deficit, as constrained South African mine output and subdued recycled supply continued to limit availability. The World Platinum Investment Council also expects above-ground stocks to fall to 2.3 million ounces, less than three months of global demand.

Platinum futures fell below $1,630 an ounce, hovering near late-November levels, as heightened geopolitical tensions weighed. Ongoing US-Iran hostilities and uncertainty surrounding the Strait of Hormuz lifted oil prices, amid conflicting claims over whether the waterway remained open. Higher energy costs renewed inflation concerns, reinforcing expectations of a rate hike by the Federal Reserve by year-end and weighing on non-yielding assets such as platinum. Meanwhile, the platinum market remained structurally tight and on track for a fourth consecutive annual deficit, as constrained South African mine output and subdued recycled supply continued to limit availability. The World Platinum Investment Council expects above-ground stocks to fall to 2.3 million ounces, less than three months of global demand, while robust investment demand and continued substitution of platinum for palladium in autocatalysts provided support.