Platinum Futures Near a 22-Year-High

September 24, 2003

Platinum Futures Near a 22-Year-High

Platinum futures prices are up nearly 19% for the year so far, standing at $705.90 a troy ounce on the New York Mercantile Exchange, reports the Wall Street Journal. It's been nearly 22 years since prices were that high. Commodities analysts say the price rise has been driven mostly by automakers who switched from palladium to platinum as the main component in catalytic converters that process car exhaust. Now, the price of palladium futures has plummeted to $218 a troy ounce. Less than two years ago, palladium cost around $400 a troy ounce, while platinum was around $470.

Platinum is expected to decline to about $650 over the next year or so, says Jeffrey M. Christian, managing director of CPM Group, a New York City commodity research firm. That's because manufacturers are expected to begin using less costly palladium again. But there is a possibility that speculators, who are driving up the cost of gold, could also keep platinum's price higher, says Christian, to give themselves a tangible asset if the U.S. dollar continues to weaken.

by Peggy Jo Donahue

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