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Investor demand for platinum bars, coins remains buoyant

17th June 2021

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The 2021 platinum bullion American Eagle 1 oz coin has achieved the second highest sales on record, with sales of 75 000 oz for the five months to May 31, industry organisation the World Platinum Investment Council (WPIC) reports.

It notes that this exceeds last year’s sales of 56 500 oz – which was noteworthy for being the highest level for 21 years – by almost 33%.

The record for sales of 1 oz platinum bullion American Eagles was set at 133 002 oz in 1998.

This year’s American Eagle platinum bullion programme started with an initial mintage of 35 000 oz in March, with a further 40 000 oz minted two months later.

The US Mint has not announced whether its 2021 mintage for platinum Eagles is to be capped at 75 000 oz, or if it intends to issue more of these coins, the council points out.

It acclaims that, this year, the platinum price has so far outperformed that of gold.

“Platinum is being viewed more widely as not only an undervalued precious metal, but also one that has the potential to support a higher value due to the strong global economic recovery that is increasing platinum’s use in industrial applications.

“While the prices of other industrial metals that also benefit from this recovery have already increased materially, platinum’s delayed response is seen by some investors as an opportunity,” the WPIC notes.

It says that several sovereign mints are struggling to meet the high consumer demand for gold and silver coins, but the additional platinum Eagles would help to meet the strong investor demand for platinum.

The 1 oz platinum American Eagle coin is available to buy from a network of dealers authorised by the US Mint; they cannot be bought directly by the public from the mint itself, the council clarifies.

BAR & COIN OUTLOOK

Last year, pandemic-related factors saw record-breaking global demand for platinum bars and coins, which reached 586 000 oz, the third highest total on record.

This was despite the fact that, owing to extremely strong retail demand, platinum bars and coins were completely sold out in North America by April 2020, and stocks were only slowly replenished from July 2020, the WPIC points out.

It notes that, this year, global demand for platinum bars and coins is expected to reach 436 000 oz, a 26%, or 150 000 oz, decrease on the exceptional prior year.

This forecast, made earlier in the year, takes into consideration the material 30% year-on-year increase in the platinum price in the first quarter of this year, which led to some profit-taking in Japan.

It also includes the expectation that the US Mint will produce only 35 000 platinum Eagles as they had stated, rather than the 75 000 now issued.

Investor enthusiasm for platinum appears more buoyant than the forecast originally anticipated, as does the interest shown in the market by providers of platinum investment products, the council says.

“Demand for precious metals as a hedge against global risk remains elevated, while platinum is attracting investors recognising its industrial uses and the upside emanating from the boost to consumption that fiscal stimulus programmes around the world are generating.

“Platinum investment demand, for bars and coins, as well as physically backed platinum exchange-traded funds, is being enhanced further by platinum’s constrained supply, growth in automotive usage and platinum’s strategic role in applications core to establishing the hydrogen economy,” highlights the council.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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