Since February, platinum's price has decreased considerably. The lack of chips will probably harm the demand for rhodium. In comparison to the costs of platinum and silver, rhodium is more susceptible to chip shortages. What may we, therefore, anticipate for the future? Here are some forecasts:
Since February, platinum prices have fallen considerably, and many investors are wondering why. This is because it is utilized in the auto catalyst market, which has experienced a downturn in recent years, especially following the Volkswagen diesel emissions crisis. While diesel vehicles have historically been popular in Europe, their use is expected to fall as the popularity of electric vehicles rises.
In addition to decreased demand, there is a serious supply constraint for the metal. A surplus of metal on the market as a result of scarcity would lower prices.
Both rhodium and palladium are heavily used in the global automotive industry. The industry uses these metals in catalytic converters. By the third quarter of 2021, a chip shortage is anticipated to have an impact on chip production, which is then anticipated to last through 2022 and potentially into 2023.
Palladium and rhodium shortages are anticipated to last at least through the second half of 2021. However, the recent decline in auto sales has allayed a supply shortage concern. These metals are less vulnerable to a price decline than they would have been if there was still considerable demand for chips, as the chip scarcity is currently anticipated to last well into Q4 2021.
The production of cars and the cost of other goods have both been impacted by the chip shortage. As thieves target them, the precious metals used in catalytic converters become more valuable. In a recycling center, even one illegally obtained catalytic converter can sell for $50 to $250. As a result, according to AlixPartners, the chip shortfall is predicted to cost the global automobile industry $210 billion in 2021. However, this amount is less than AlixPartners' initial prediction of $60.6 billion made in late January.
The demand for precious metals has decreased during the past year. Rising interest rates are one reason for this. The higher U.S. dollar has also harmed the value of other currencies. Prices are also affected by geopolitical factors like the Russian invasion of Ukraine and rising inflation.
But some researchers predict that the demand for precious metals will increase going forward. Significant sales and finance opportunities will result from the transition to green and sustainable technologies, particularly in Asia, North America, and Europe. Currently, the automotive sector consumes just a small amount of precious metals, but as the manufacturing of these cars rises over the coming years, it is anticipated that this impact will increase. The passenger automobile market is anticipated to have the highest demand for precious metals between 2022 and 2031. Due to their great endurance, platinum and palladium are anticipated to dominate the industry.
Moreover, the relaxation of COVID-19 limits will support silver demand. In addition, the jewelry market will keep expanding. The Omicron wave, which will arrive in early 2022, will curb this expansion. Additionally, a 21% rise in silverware production is anticipated this year. India will be the main driver of this increase.
The lack of precious metals in 2021 will probably drive up the price of silver. Typically, there will be a five to ten percent increase in the price of silver. In 2021, the anticipated shortage will be negligible compared to the total supply. The expectation of a tightening cycle will influence investor confidence, and industrial demand will be constrained by the lack of certainty surrounding the post-pandemic global economic recovery. The underlying imbalance is anticipated to be reduced by a strong rebound in the metal supply, leading to a more balanced market in 2022.
Strong industrial fabrication and increasing vehicle electrification are just two of the factors that will influence the supply and demand of silver. In addition, the president of the European Commission recently announced a directive to raise the number of rooftop solar panels over the following five years. The demand for silver, mostly used to make P.V. panels, will rise as a result.
In the coming months, it's anticipated that the price of gold will decline as investors switch to U.S. bonds with yields around 2%. Even while this is a poor omen for the metal, a short-term price adjustment is expected to be sparked by it. It's also critical to remember that since the start of 2018, the price of gold has increased by more than 40%. The price of gold is anticipated to reach $1,800 per ounce in the first quarter of 2021 before declining to $1,750 in 2022.
The World Gold Council estimates an 80% shortfall between the global supply and demand for gold. However, it is anticipated that in 2021, the demand for gold will rise by 10% globally. This is the outcome of growing central bank demand on a worldwide scale. In 2021, central banks acquired roughly 430 tons of gold, boosting global gold holdings to previously unheard-of levels. In addition, retail consumption climbed by about 10% in 2021, and gold consumption in jewelry production and tech products.
Since February, platinum prices have fallen considerably, and many investors are wondering why. This is because it is utilized in the auto catalyst market, which has experienced a downturn in recent years, especially following the Volkswagen diesel emissions crisis. While diesel vehicles have historically been popular in Europe, their use is expected to fall as the popularity of electric vehicles rises.
In addition to decreased demand, there is a serious supply constraint for the metal. A surplus of metal on the market as a result of scarcity would lower prices.
Both rhodium and palladium are heavily used in the global automotive industry. The industry uses these metals in catalytic converters. By the third quarter of 2021, a chip shortage is anticipated to have an impact on chip production, which is then anticipated to last through 2022 and potentially into 2023.
Palladium and rhodium shortages are anticipated to last at least through the second half of 2021. However, the recent decline in auto sales has allayed a supply shortage concern. These metals are less vulnerable to a price decline than they would have been if there was still considerable demand for chips, as the chip scarcity is currently anticipated to last well into Q4 2021.
The production of cars and the cost of other goods have both been impacted by the chip shortage. As thieves target them, the precious metals used in catalytic converters become more valuable. In a recycling center, even one illegally obtained catalytic converter can sell for $50 to $250. As a result, according to AlixPartners, the chip shortfall is predicted to cost the global automobile industry $210 billion in 2021. However, this amount is less than AlixPartners' initial prediction of $60.6 billion made in late January.
The demand for precious metals has decreased during the past year. Rising interest rates are one reason for this. The higher U.S. dollar has also harmed the value of other currencies. Prices are also affected by geopolitical factors like the Russian invasion of Ukraine and rising inflation.
But some researchers predict that the demand for precious metals will increase going forward. Significant sales and finance opportunities will result from the transition to green and sustainable technologies, particularly in Asia, North America, and Europe. Currently, the automotive sector consumes just a small amount of precious metals, but as the manufacturing of these cars rises over the coming years, it is anticipated that this impact will increase. The passenger automobile market is anticipated to have the highest demand for precious metals between 2022 and 2031. Due to their great endurance, platinum and palladium are anticipated to dominate the industry.
Moreover, the relaxation of COVID-19 limits will support silver demand. In addition, the jewelry market will keep expanding. The Omicron wave, which will arrive in early 2022, will curb this expansion. Additionally, a 21% rise in silverware production is anticipated this year. India will be the main driver of this increase.
The lack of precious metals in 2021 will probably drive up the price of silver. Typically, there will be a five to ten percent increase in the price of silver. In 2021, the anticipated shortage will be negligible compared to the total supply. The expectation of a tightening cycle will influence investor confidence, and industrial demand will be constrained by the lack of certainty surrounding the post-pandemic global economic recovery. The underlying imbalance is anticipated to be reduced by a strong rebound in the metal supply, leading to a more balanced market in 2022.
Strong industrial fabrication and increasing vehicle electrification are just two of the factors that will influence the supply and demand of silver. In addition, the president of the European Commission recently announced a directive to raise the number of rooftop solar panels over the following five years. The demand for silver, mostly used to make P.V. panels, will rise as a result.
In the coming months, it's anticipated that the price of gold will decline as investors switch to U.S. bonds with yields around 2%. Even while this is a poor omen for the metal, a short-term price adjustment is expected to be sparked by it. It's also critical to remember that since the start of 2018, the price of gold has increased by more than 40%. The price of gold is anticipated to reach $1,800 per ounce in the first quarter of 2021 before declining to $1,750 in 2022.
The World Gold Council estimates an 80% shortfall between the global supply and demand for gold. However, it is anticipated that in 2021, the demand for gold will rise by 10% globally. This is the outcome of growing central bank demand on a worldwide scale. In 2021, central banks acquired roughly 430 tons of gold, boosting global gold holdings to previously unheard-of levels. In addition, retail consumption climbed by about 10% in 2021, and gold consumption in jewelry production and tech products.