by Jacob Watson
If you notice the recent trends of platinum price, you will see that there is a lot of correlation to the price of gold. When gold price starts increasing, so does platinum and when gold pulls back, so does platinum. You can therefore understand the price of platinum based on the behavior of the gold market. Platinum has a very small market in trading, compared to gold and silver and hence even a small amount of change in the buying and selling will bring about a change in its price. Hence, there is volatility in the platinum price.
Another factor that affects the price of platinum is the supply from the mines. However, it has to be accepted that the demand for this metal is the major factor in affecting its price. Due to the recent recession all over the world, there has been a general decline in the demand for platinum, among other metals and commodities. The industrial applications have also reduced in case of platinum.
Development and consumption has reduced in several countries and manufacturers are reducing the amount of goods produced using platinum. This results in fall in platinum price. Metals, like platinum, have a high industrial demand and react immediately to such conditions.
It is known that about 66% of the platinum that is being mined and produced is being used in industry. A decline in this use brings a fall to the price of platinum. This is so especially due to the fall in the auto catalysts market. When the demand for this product came down, the platinum price started getting depressed. This has been offset to a certain extent due to the jewelry market, where platinum is also used. The supply of platinum also seems to have slowed down in the mines.
If the market for platinum improves with increased investment in ETFs as also in platinum jewelry, there could be a sudden surge in the price of platinum. This should be considered in combination with a reduction in the supply, which will result in the prices rising. This will bring about a profit to investors, as also to miners who produce this metal.
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New Unique Article!
Title: Why the price of platinum fluctuates?
Author: Jacob Watson
Email: media@patternmedia.com
Keywords: platinum,precious metals,mining,finance,currency,money,metals,business,investing,investment,investments
Word Count: 359
Category: forex
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