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Platinum showing signs of improvement Posted: Thu, 02 Apr 2009 [miningmx.com] -- THE platinum price is unlikely to advance much from its two-year lows given the parlous state of the global economy that governments of the leading 20-richest nations are endeavouring to address. The platinum price, which appears to be taking direction from the gold price, is unlikely to draw much comfort from developments at the G20 summit and will remain muted until the car industry shows signs of recovery, analysts say. Platinum has two uses. It is used to make catalysts in exhaust systems of motor vehicles as well as in the jewellery business. Demand from the auto sector makes up roughly half the demand for the white metal. Matthew Turner, an analyst at London-based metals consultancy VM Group, says the global car industry slowdown has shown signs of bottoming out. “The G20 will not have a strong impact on the platinum price. Platinum reacts to trends, so one week it will strengthen and the next it will weaken depending on market sentiment,” he said. A JP Morgan platinum sector update published in March said the global financial meltdown was the most significant negative economic event since the Great Depression in the 1930s. "We seriously doubt that the governments of the world’s most powerful nations would be taking the desperate measures they are if the informed perception was that 'this is only a flesh wound'," JP Morgan said. "We do not expect the situation to turn miraculously, and we will be surprised if the 'hard' demand drivers for platinum are transformed soon," the report said. The platinum price fell from a high of $2,290/oz in March 2008 to as low as $732 in October, sparking fears about most, if not all, mining firms of the metal were producing at a loss. Since then, it has been recovering steadily and is currently sitting at around $1,140. Click Here to subscribe to our daily newsletter 
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