London, England — MININGREVIEW.COM — 26 January 2010 – Even after a record 57% rally last year, platinum is cheap relative to gold, signaling more gains as demand grows from carmakers and exchange-traded funds.
Data compiled by Bloomberg News shows that an ounce of platinum currently buys 1.42 ounces of gold “’ down 42% from the record 2.43 ounces in 2001, and 23% less than the 10-year average.
Automakers, the biggest buyers, will expand output 20% this year, said Evan Smith, who helps manage US$2 billion (R15 billion) at U.S. Global Investors.
“We are long platinum and short gold,” said Jonathan Barratt, the Sydney-based managing director of Commodity Broking Services Pty, who predicted platinum’s rally in September. “Gold remains under pressure. As inflation moves lower and the dollar goes higher, gold isn’t as solid,” he added.
Bank of America-Merrill Lynch strategist Michael Widmer raised his forecast for this year by 35% to an average of US$1 750, and predicted US$2 000 for 2011. Standard Chartered Plc forecasts that platinum will be one of the year’s best commodities. Prices may jump 55 percent to a record US$2 400 by mid-year, said Joerg Ceh, head of commodity trading at Landesbank Baden- Wuerttemberg in Stuttgart, Germany’s biggest state-owned lender.
A rally in metals would extend gains in shares of Johannesburg-based Anglo Platinum Limited and Impala Platinum Holdings Limited “’ the world’s biggest producers. Anglo soared to a 15-month high of R819 rand earlier this month, and closed at R752-36 rand on Friday. Credit Suisse Standard Securities Limited “’ the joint venture of Credit Suisse Group AG and Standard Bank Group Limited “’ raised the companies’ status to “outperform” last week.
About 80% of the world’s platinum supply comes from South Africa, where power cuts shut mines in 2008 because the generators couldn’t produce enough electricity to meet demand. Energy use may surge again in June and July this year when the nation hosts soccer’s World Cup.