Platinum Pressured Near November Lows

Platinum futures hovered around $1,630 an ounce, pressured near late-November lows as softer industrial demand and inflationary risks stemming from the Middle East war weighed on the market. The conflict has kept energy prices elevated, fueling inflationary pressures and reinforcing expectations that interest rates will remain higher for longer, reducing the appeal of non-yielding assets such as platinum. Although the US Federal Reserve left interest rates unchanged, Chairman Kevin Warsh warned that higher interest rates could become an appropriate policy response if inflation remains elevated. The platinum market was also weighed down by expectations for softer industrial and automotive demand despite the tight supply outlook. The ongoing shift toward electric vehicles, which do not require autocatalysts, has clouded demand prospects even as the market is forecast to post a fourth straight annual supply deficit due to constrained mine supply and declining above-ground inventories.

Platinum futures traded around $1,600 an ounce, near late-November lows, pressured by weakness across precious metals amid persistent hostilities in the Middle East. The conflict kept inflation risks in focus and reinforced expectations that interest rates could stay higher for longer, weighing on non-yielding assets such as platinum. Investors now await the Federal Reserve's policy decision, where rates are widely expected to remain unchanged. Still, markets see about a one-third chance of a rate hike this week and roughly an 80% chance of another increase in September. The platinum market was also weighed down by expectations for softer industrial and automotive demand despite the tight supply outlook. The ongoing shift toward electric vehicles, which do not require autocatalysts, has clouded demand prospects even as the platinum market is forecast to post a fourth straight annual supply deficit due to constrained mine supply and declining above-ground inventories.

Platinum futures held around $1,620 an ounce, supported by strength across the precious metals complex as oil prices dropped following a pause in the US-Iran conflict. The US suspended its nearly two-week campaign of strikes against Iran beginning late Friday, while Tehran said it had ended its retaliatory strikes and held talks with Oman regarding the Strait of Hormuz. Still, platinum prices remained near late-November lows due to prospects of higher interest rates and persistent inflation. The Federal Reserve is widely expected to leave interest rates unchanged at its policy meeting this week, although some believe the central bank could move as early as this meeting. Prices were also weighed down by expectations for softer industrial and automotive demand despite the tight supply outlook. The ongoing shift toward electric vehicles, which do not require autocatalysts, has clouded demand prospects even as the platinum market is forecast to post a fourth straight annual supply deficit.