Precious metals: The fundamental determinants of their price behaviour

Abstract

This paper analyses the fundamental factors that determine price developments in the markets for gold, silver and platinum. The distinguishing features characterizing each of the metals are brought out. The factors analysed include: the central role of South Africa and the USSR in the mine supply of gold and platinum; the overwhelming importance of the photography industry and catalytic automobile converters in the demand for silver and platinum; and the use of precious metals for investment and hoarding. In the case of gold, the inventory owners wield a far greater influence than any other factors that affect that market.