Monday, April 15, 2024

UBS raises platinum, palladium forecast on expected ETF launches

LONDON (Thomson Financial) – Recent strong interest for palladium and platinum Exchange Traded Funds (ETF) has prompted analysts at UBS Investment Bank to raise their price forecasts for the two metals.

Zurich Cantonal Bank’s announcement last Friday that platinum and palladium ETFs will be listed on the SWX market in Switzerland on May 10 have boosted prices of the two metals and raised speculation they could go higher still.

ETFs trade commodity futures and back up every ounce of stock bought on paper with the actual physical commodity. As a result, the launch of an ETF often squeezes the market as it eats up the amount of physical stock available.

The bank said it has ‘modest ambitions for the platinum and palladium ETFs’, expecting they will take only 70,000 ounces of platinum and 200,000 ounces of palladium off the market within a year.

‘We suspect this is too conservative,’ said UBS Investment Bank analyst John Reade. ‘Hedge funds and private investors have been historically active in the platinum group metals and we would not be surprised if the…ETFs attract considerable interest from these investors.’

UBS now expects both metals will surge going forward, with platinum hitting 1,350 usd an ounce and palladium reaching 420 usd over the next three months, an upgrade from previous estimates of 1,300 usd and 380 usd respectively.



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Sam Allcock
Sam Allcock
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