GOLD & SILVER READY FOR MAJOR BREAKOUTS ON THE BACK OF PLATINUM SURGE
by Sumit Roy
August 21, 2012
We offer our latest analysis on the precious metals market.
Gold spiked today to the highest level since May, and is now challenging the top of a trading range that has contained prices for the past three months. The catalyst for the latest move came from an unexpected place—South Africa.
Labor unrest in the world’s largest platinum- and palladium-producing country sparked a furious rally in the prices for those metals. Lonmin, the No. 3 platinum miner, shut down all of its operations amid a violent row with workers. At least 44 people have died so far.
Lost output has naturally pushed up platinum prices significantly. Prices for the autocatalyst were last trading above $1500, at the top end of its recent trading band.
Labor disputes are not uncommon in South Africa. Earlier this year, the No. 2 platinum miner in South Africa, Impala, shut down its output for six weeks due to a strike. That led to a loss of 120,000 ounces of production.
Whether the rally in platinum continues depends on how long the current strike lasts and whether unrest spreads to other producers in South Africa.