ROME: HSBC has downgraded its annual platinum price forecast due to the poor investment climate, it said.
The bank now sees the metal averaging $1,237 per ounce in 2015, it said in a note on Wednesday. Platinum recently fell below the $1,100 level for the first time in six years in March from its peak this year $1,288 in January.
Although the metal has compelling fundamentals, it faces “a challenging macroeconomic environment which has undermined prices this year”, HSBC’s James Steel said.
This indicates long-running structural deficits, he added. The price reflects the fact that above-ground stocks are much larger than generally expected, though there is no verifiable data to support this. Low lease rates support the view that there appears to be no immediate shortage of stocks.
But stocks are gradually eroding, which supports the bank’s view that there will be a rally in the long term the bank left its 2016 forecast of $1,510 and 2017 forecast of $1,600 unchanged.
On the demand side, the slowing economy and overall decline in luxury goods demand in China is hurting platinum, it said.
