Global industrial activity is expected to grow this year, boosting demand and prices for precious metals, according to a survey of institutional investors and wealth managers.
Two thirds of investors (67%) predict industrial activity will increase in 2021, according to a study by ETC provider Global Palladium Fund (GPF), with 69% of respondents anticipating this activity will push prices higher for metals such as silver, palladium and Platinum.
Almost a quarter (24%) of investors predict that prices will increase dramatically.
Nine out of 10 investors said growing electric car sales in China will play an important role in lifting palladium prices, as will the weak US dollar; while over three quarters (77%) said that continuing shortages of the metal would also be a factor. Over two thirds (67%) of investors said tighter emission standards would also push prices higher for the metal which is used in catalytic converters.
The majority (95%) of investors agree that industrial demand for Platinum should increase over the coming months and years, and 85% predict that the price will rise in 2021. Platinum, which has unique hydrogen-absorbing properties and is an essential metal for cleaning toxins from the environment, is also very inexpensive compared to its substitutes palladium and rhodium.
“Our research shows just how important precious metals are to making the green economy a reality,” said Alexander Stoyanov, chief executive of GPF. “Their properties mean that they have a fundamental role to play in technologies such as hydrogen fuel cells and other green technologies crucial to changing the world we live in and, as a result, demand for metals such as palladium and platinum will increase.”
The survey of 100 professional investors, equally split between institutional investors and wealth managers, was conducted online in January 2021. GPF, which is distributed by NTree International, was set up by Norilsk Nickel, the world’s largest producer of palladium and a major producer of other precious metals.