Over the last few weeks, the prices of the precious metals gold and platinum have been neck and neck. Both are currently trading around $1,680. Today, CNBC asked the question, "Which precious metal will win the race to $2,000?"
CNBC reported that analysts favored platinum over gold to make the price jump to $2,000 per ounce first, citing platinum’s used as an industrial raw material and in making jewelry.
"I'm bullish on platinum. I think it will have no problem getting into the upper $1,900s and $2,000s as will gold,” said Sean Hyman, editor of the Ultimate Wealth Report, a monthly publication on market trends. “But I think platinum will reach there first.”
Hyman projected that the price of platinum would reach $2,000 an ounce in the next six to nine months. It reached that level previously in July 2008. From current pricing, that represents an increase of 20 percent.
Platinum is widely used in making catalytic converters for automobiles and other vehicles, and increasing global auto manufacturing and interruptions in platinum mining and production will drive the price of the precious metal high.
Platinum mines in South Africa, which is the largest producer of the precious metal, has already led to limits in the supply chain. Meanwhile, increased operational costs have led other mining companies to close their platinum mines altogether.
Eugen Weinber, who leads commodities research at Commerzbank agreed that platinum will win the race to $2,000. He stated that the disruption of production in South Africa has not been completely priced in to estimates. He expects to see further mine closures going forward, and believes that will drive the price of platinum up even faster than most analysts have projected.
Regarding gold, Weinber stated that the price increase for the precious metal has been "postponed" but not "abandoned."
He projected that inflationary pressures will become more visible in the second-half of the year, which in turn bulk up gold bullion prices. He believes gold could hit $2,000 at some point in the fourth quarter or in early 2014.
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byUnited States Gold Bureau