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Platinum, Palladium to benefit from tightening fundamentals

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LONDON (Scrap Register): Societe Generale looks for platinum and palladium to rise on tightening supply/demand fundamentals, with palladium likely to outperform.

Investors are starting to pay more attention to these precious metals as gold consolidates, helping platinum and palladium rise last week to the highest level in more than a year.

SocGen cited a report from the GFMS team at Thomsen Reuters forecasting a platinum supply deficit of 200,000 ounces this year and a palladium deficit of 1.25 million.

SocGen cites growing auto-catalyst demand, the resumption of U.S. Mint sales of platinum coins last month and news that the Mint is in negotiations to develop a first-ever palladium coin program.

Additionally, current wage negotiations between South African unions and producers are also supportive for prices, said SocGen.

Looking forward, SocGen predicts that platinum and palladium will continue to benefit from their forecast tightening in fundamentals, with palladium leading the way.

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