Johannesburg, South Africa — 27 January 2009 – Two leading South African financial services companies – JP Morgan and RBC Capital Markets – are predicting a better outlook for gold than for platinum in 2009
Fin24 reports that research reports from both firms point to better fundamentals for gold compared to platinum over the next six to 12 months, and suggest that precious metal investors should be getting into gold stocks in preference to platinum shares,
RBC Capital Markets analyst Leon Esterhuizen said: “The South African gold mines are expected to report poor quarterly results for the fourth quarter of the 2008 calendar year, before reporting significantly better numbers into the 2009 calendar year. In a sense then, we believe this is the beginning of a much better performance stretch for South African gold sector stocks,” he added.
“This contrasts sharply with the platinum group metals (PGM) miners which are expected to reflect the impact of the significant decline in the metal price basket over the fourth quarter, something that we expect to continue dragging earnings down even further into 2009,” Esterhuizen continued.
JP Morgan analysts Steve Shepherd and Allan Cooke said: “The immediate outlook for PGMs appears bleak in our view, with consumers withdrawing from the key demand segments – autos, consumer electronic products and – with the possible exception of China – jewellery.”
They recommended an underweight exposure to platinum equities. “We much prefer gold equities, where we see both absolute and relative outperformance potential,” they added.
The Golden Goose Outlook for 2009 – a separate JP Morgan report which has just been published – concludes “while deflation persists there will be downward pressure on gold prices, though financial fear and anticipation of inflation attracts gold buyers. We remain very positive on the gold space and the gold equities as a relatively safe haven,” the outlook stated.