Europe’s recession is a bit worse than expected, according to a new report, causing concerns that demand for platinum could fall sharply. The metal's price dropped by the most in over two weeks.
GDP across the Eurozone dropped 0.6 percent over Q4, signaling the worst figures since Q1 2009. Platinum figures largely in European vehicular pollution-control mechanisms.
Reduced output from South Africa—the world’s largest producer of platinum—has already caused prices to go up 11 percent thus far this year.
“Economic worries about Europe are pushing platinum down,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “The overall trend, however, is bullish as supply concerns remain.”
Platinum futures for April on the NYMEX dropped to $1,710.90—down 1.1 percent—as of 1:15PM yesterday.
Overall, the uncertainty regarding supply is likely to keep platinum prices high despite any temporary fluctuations based on the Eurozone data.