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With the dust barely settled on the recent squeeze in the silver market, and with gold just this week experiencing a violent price correction, precious metals traders are contending with yet another drama, this time in the platinum market.
Spot prices for platinum in London surged by as much as 6.4% to $1,646.03 an ounce on Wednesday, the biggest intraday jump since 2020. Platinum futures on Nymex also jumped, but only as much as 4.1%.
London and New York prices typically trade in lockstep, so the blow-out in the differential between the two is highly unusual. The benchmark spot contract hit a $53.45-per-ounce premium over futures, up from $28 on Tuesday.
That suggests a scramble to obtain physical metal, similar to what has taken place this month in the silver market, with institutional and retail investors alike rushing to get their hands on the commodity. The panic in silver saw spot prices leap to a record, eclipsing the benchmark set 45 years earlier when the Hunt brothers attempted to corner the market.
Platinum is “tightening heavily with dislocations now pushing extremes, echoing fears of another silver-squeeze moment,” said Dan Ghali, senior commodity strategist at TD Securities.
“This is a particularly odd time for a platinum squeeze,” Ghali added, pointing out that there should be ample global supply. China exported the largest amount of platinum products of 140,000 ounces last month since the start of data collection, he noted. “And yet, the system’s liquidity is clearly stressed.”
(By Yvonne Yue Li)