What’s Rhodium Telling Us?

Platts reports this week that rhodium prices have fallen below $1,000 per ounce. The first time we’ve seen this level since mid-2004.

This is quite a fall from the $10,000/oz that prevailed in 2008. It’s also the lowest Rh price of post-crisis times.

The interesting thing is that rhodium’s sister metal platinum is holding up well. At a current $1,500/oz, Pt is not far off its post-crisis high of $1,850.

Both rhodium and platinum are dependant on industrial demand from the auto sector. But platinum is also an investment metal. And investment demand has been increasing. Up approximately 25% over the past year.

It would thus appear that “safe haven” demand is what’s keeping platinum strong as pure industrial metals tumble. An indication that the global economy is not as strong as many believe. And that investors are increasingly edgy about more financial problems ahead.

Something to consider as we place our investment bets.

Here’s to the platinum group,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

 

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