Precious metals star performer in Q3, Deutsche Bank prefers PGMs
Analysing China data, Deutsche Bank noted that platinum imports have been strong over the recent months while palladium and silver imports have been weak
Precious metals have performed well in the third quarter providing positive returns of approximately 13%, according to Deutsche Bank. However, the bank is more upbeat on platinum group metals (PGM) which includes platinum and palladium on strong autocatalyst demand especially in China.
Commodity indices have performed well in Q3 providing positive returns while precious metals outpeformed others. "This has been despite showcasing maximum losses on a total returns basis. The strength in the precious metals sector is attributed to the recent rally in gold. Even as the threats of tapering and fund outflows are weighing down on gold prices, this is partially offset by expectations of opportunistic demand from India."
Analysing China data, Deutsche Bank noted that platinum imports have been strong over the recent months while palladium and silver imports have been weak. Trading volumes of platinum on the Shanghai Gold exchange (SGE) would suggest an opportunistic buyer pattern during periods of price weakness, but also that jewellery demand remains healthy and is potentially an upside to our supply - demand balance for 2013.
"Given the strong domestic vehicle production YTD, we would expect palladium imports to be stronger. Potentially this indicates good supplies in China or that loadings are not quite as high as we had expected."