Platinum Prices Research Articles

Forecasting the price of gold

This article seeks to evaluate the appropriateness of a variety of existing forecasting techniques (17 methods) at providing accurate and statistically significant forecasts for gold price. We report the results from the nine most competitive techniques. Special consideration is given to the ability of these techniques to provide forecasts which outperforms the random walk (RW) as we noticed that certain multivariate models (which included prices of silver, platinum, palladium and rhodium, besides gold) were also unable to outperform the RW in this case. Interestingly, the results show that none of the forecasting techniques are able to outperform the RW at horizons of 1 and 9 steps ahead, and on average, the exponential smoothing model is seen providing the best forecasts in terms of the lowest root mean squared error over the 24-month forecasting horizons. Moreover, we find that the univariate models used in this article are able to outperform the Bayesian autoregression and Bayesian vector autoregressive models, with exponential smoothing reporting statistically significant results in comparison with the former models, and classical autoregressive and the vector autoregressive models in most cases.

Monetary Policy Surprises, Positions of Traders, and Changes in Commodity Futures Prices

Using futures data for the period 1990–2008, this paper finds evidence that expansionary monetary policy surprises tend to increase crude and heating oil prices, and contractionary monetary policy shocks increase gold and platinum prices. Our analysis uncovers substantial heterogeneity in the magnitude of this response to positive and negative surprises across different commodities and commodity groups. The results also suggest that the positions of futures traders for the metals and energy commodities strongly respond to monetary policy shocks. The adjustment of the net long positions of hedgers and speculators appears to be a channel through which the monetary policy shocks are propagated to commodity price changes.

Dynamic interacting relationships among international oil prices, macroeconomic variables and precious metal prices

From the perspective of long-term and short-term, the methods of TY causality test, generalized impulse response function, variance decomposition were used to investigate the impacts of international oil prices and macroeconomic variables on Chinese gold, silver and platinum prices, but also the feedback effects of Chinese precious metal prices under this impact. The results show that international oil prices play an important role in precious metal price variation both in long-term and short-term, and exchange rate only has an effect in short-term, while interest rate is ineffective in predicting precious metal prices. In addition, precious metal prices have some feedback effects on international oil prices and interest rate in short-term.

A Garch Model Test of The Random Walk Hypothesis: Empirical Evidence from The Platinum Market

The paper investigates whether there are periods when platinum prices follow the random walk process (weak-form efficient) and periods when they deviate from the random walk theory (mean reversion). Monthly log returns of platinum prices are examined using the Augmented Dickey-Fuller test (ADF) and a GARCH model with time-varying properties. A GARCH model with time-varying properties is able to capture periods when the random walk theory may be true and periods when it may be false. This study confirms the existence of random walk for platinum prices over the period January 1970 to May 2012. From the year 1999 to the year 2010, the drift parameter is positive and statistically significant. Therefore, the platinum market is regarded as weak-form efficient. DOI: 10.5901/mjss.2014.v5n14p77

Forecasting High Frequency Data: An ARMA-Soft RBF Network Model for Time Series

In the article we alternatively develop forecasting models based on the Box-Jenkins methodology and on the neural approach based on classic and fuzzy logic radial basis function neural networks. We evaluate statistical and neuronal forecasting models for monthly platinum price time series data. In the direct comparison between statistical and neural models, the experiment shows that the neural approach clearly improve the forecast accuracy. Following fruitful applications of neural networks to predict financial data this work goes on. Both approaches are merged into one output to predict the final forecast values. The proposed novel approach deals with nonlinear estimate of various radial basis function neural networks.

Electrocatalysis on Shape‐Controlled Titanium Nitride Nanocrystals for the Oxygen Reduction Reaction

The high price of platinum (Pt)-based cathode catalysts for the oxygen reduction reaction (ORR) have slowed down the practical application of fuel cells. Thanks to their low cost, and outstanding, stable catalytic properties, titanium nitrides (TiN) are among the most promising non-precious metal electrocatalysts for replacing Pt. However, the shape-activity relationships of TiN electrocatalysts have not been well-studied or understood up to now. In this work, by simply adjusting the shape of TiO2 precursor, we are able to tailor the morphology of the TiN catalysts from nanoparticles to nanotubes. We have synthetized uniform carbon-coated titanium nitride nanotubes (carbon-coated TiN NTs) through a nitridation reaction in NH3 flow using a TiO2 nanotubes/melamine mixture as precursor. The carbon-coated TiN NTs hybrids exhibit excellent electrocatalytic activity for the ORR, coupled with superior methanol tolerance and long-term stability in comparison to commercial Pt/C, through an efficient four-electron-dominant ORR process. Compared with nanoparticles, the one-dimensional and hollow structure of the nanotubes result in greater diffusion of electrolyte and superior electrical conductivity, and contribute to the greatly improved electrocatalytic performance of the carbon-coated TiN NTs nanocomposites.

Carbon nanotube as an alternative cathode support and catalyst for microbial fuel cells

Microbial fuel cells (MFCs) hold great promise as an alternative for direct biochemical energy extraction from both biomass and wastewater. However, the commercialization and scaling-up of MFCs is not completely feasible, due to the high price of platinum (Pt) as a cathode catalyst. In this paper, we studied the use of a carbon nanotube (CNT) composite catalyst, to reduce the amount of Pt (without decline of efficiency) for moving towards the commercialization of MFCs. CNT/Pt composite electrodes would increase MFC power output by 8.7–32.2%; with respect to the pristine Pt as a catalyst for the cathode at a chemical oxygen demand (COD) substrate of 100mg/l and 2000mg/l, respectively. Moreover, the amount of Pt in the CNT/Pt electrode could be reduced by up to 25% of the amount necessary for a conventional Pt/carbon electrode.

Exchange-Traded Products investing and Precious Metal prices

The recent increase in precious metal prices has been partly attributed to the strong flows into related Exchange-Traded Products (ETPs), and thus there are growing concerns that ETPs’ flows are distorting prices away from their fundamentals. Literature on the relationship between commodity investing and commodity prices is fast growing, but the current study is the first academic attempt to examine directly the impact of ETPs on the underlying metal returns. This article attempts to empirically investigate whether the introduction of precious metal ETPs affects the respective spot prices. In particular, the impact of the investment flows in 28 products on the prices of gold, silver, platinum and palladium is tested. The empirical findings of this study suggest that there is a strong statistical significant positive contemporaneous relationship between the inflows and outflows in the precious metal ETPs and the returns of the underlying metals. This interdependence raises the risk of potential severe redemption pressures on certain types of ETPs in cases of market turmoil, which could in turn hurt the large asset managers and banks active in this market.

Metal Investments: Distrust Killer or Inflation Hedging?

This study investigates long run metals properties using the extended version of Mccown and Zimmerman (2006) multifactor CAPM-model. By adding extra explanatory variables we improve the explanation power of the existing model in terms of R-squared. Taking German invertors’ perspective and using prices of gold, silver and platinum over the period 1985-2010, our findings show that metals are true zero market beta assets. We further show that the determinants of metal prices are dependent on market conditions reflected by different betas for stable and crisis periods. The inclusion of a new variable, economic sentiment index in the models shows explanation power for gold. Its significant negative effect reveals gold position as a safe haven in times of distrust. Our results show that gold is the only metal co-integrated with the consumer price index (CPI) of Germany, thus the only metal providing inflation hedging to the German investor in the long run. Our results are consistent with the theories that metals provide long term hedge against unemployment.

The impact of widespread deployment of fuel cell vehicles on platinum demand and price

Current automotive fuel cells rely on platinum catalysts. At today’s platinum loading and price, a 50-kW fuel cell contains approximately 46 g of platinum costing $2200. Analysts expect that with further development of fuel cell technology, the platinum loading per car will decline perhaps by an order of magnitude, which will tend to reduce platinum costs per car. However, cost reductions from a decline in platinum loading might be partially offset by an increase in the price of platinum. Historically, platinum prices have been sensitive to changes in demand, and the widespread substitution of fuel cell vehicles (FCVs) for internal-combustion engine vehicles (ICEVs) might significantly drive up platinum demand and hence platinum prices. The possible impact of rising platinum prices has been raised as a potential barrier to the commercialization of FCVs. In this paper, we estimate the total cost of platinum in future FCVs considering the impact of worldwide introduction of hydrogen FCVs on platinum loading, platinum demand and price. The total platinum cost per FCV is the product of the platinum per FCV and the price of platinum. Using historical data and a scenario for platinum recycling, we estimate the price of platinum as a function of demand, which in turn is a function of the amount of platinum per FCV and the total number of FCVs. For a scenario where FCVs reach 40% of light-duty vehicle (LDV) sales globally by 2050, we find that the average platinum price increases by around 70%, but that the average platinum loading declines by about 90%, so that the overall the cost per FCV declines by almost 80%, from current values of about $2200 to about $500 in 2045 and beyond. In 2045, platinum cost accounts for about 12.6% of the fuel cell system cost and about 4% of the vehicle cost.

Dating the Timeline of Financial Bubbles During the Subprime Crisis

A new recursive regression methodology is introduced to analyze the bubble characteristics of various financial time series during the subprime crisis. The methods modify a technique proposed in Phillips, Wu and Yu (2010) and provide a technology for identifying bubble behavior and consistent dating of their origination and collapse. The tests also serve as an early warning diagnostic of bubble activity. Seven relevant financial series are investigated, including three financial assets (the Nasdaq index, home price index and asset-backed commercial paper), two commodities (the crude oil price and platinum price), one bond rate (Baa), and one exchange rate (Pound/USD). Statistically significant bubble characteristics are found in all of these series. The empirical estimates of the origination and collapse dates suggest an interesting migration mechanism among the financial variables: a bubble first emerged in the equity market during mid-1995 lasting to the end of 2000, followed by a bubble in the real estate market between January 2001 and July 2007 and in the mortgage market between November 2005 and August 2007. After the subprime crisis erupted, the phenomenon migrated selectively into the commodity market and the foreign exchange market, creating bubbles which subsequently burst at the end of 2008, just as the effects on the real economy and economic growth became manifest. Our empirical estimates of the origination and collapse dates match well with the general datetimes of this crisis put forward in a recent study by Caballero, Farhi and Gourinchas (2008).

Evaluation of a platinum leasing program for fuel cell vehicles

This paper evaluates the feasibility of a platinum leasing program for future fuel-cell vehicles (FCVs) in the United States. By internalizing the residual value of platinum in the vehicle's upfront cost, a platinum lease may offer cost savings to the consumer. Several leasing scenarios were evaluated to estimate potential cash savings. The study concludes that under ideal conditions, the upfront price of platinum could be reduced by 40% compared to a no-lease scenario. However, even small increases in the lease rate greatly reduce these savings. The benefits depend on the extent to which lending risks are minimized, and on the vehicle's platinum loading. These benefits will be greatest during initial stages of market penetration, when the technology is less proven and platinum loadings are highest. To ensure low lease rates, governmental support is likely necessary, both to minimize risk exposure and borrowing costs, and to optimize platinum recovery.

Gold and platinum: Toward solving the price puzzle

Gold and platinum prices are positively correlated over 1985–2006. Yet, over shorter sample periods the correlation changes from positive to negative (1996–2001) and back. The objective of this paper is to determine whether this shift is the result, at least in part, of the rapid increase in forward sales by gold producers, which had the effect of substantially lowering gold prices in the second half of the 1990s (Kearney, A. & Lombra, L. (2008). The non-neutral short run effects of derivatives on gold prices. Applied Financial Economics, 18, 985–994). The results show declining gold prices are associated with large net increases in forward sales, while rising gold prices are associated with declining forward sales or producer dehedging.

Platinum price rises because of output concerns

Platinum price rises because of output concerns

The Dynamics of Palladium and Platinum Prices

This paper tests for and provides evidence of nonlinear dependencies in palladium and platinum futures prices. The results indicate that ARCH-type processes, with controls for seasonality and contr...

Platinum, fuel cells, and future US road transport

The rate at which fuel cell vehicles (FCVs) might displace the conventional fleet is examined under constraints imposed by the limited availability of platinum. It concludes that a transition period as short as 31 years is not feasible. Under the most favorable circumstances, a complete transition of the US fleet to this new technology would require about 66 years and 10,800 net tonnes of platinum. Platinum demand for the US auto industry alone would amount to 48% of world production during much of that transition period. The effect of that demand on the price of platinum would add to the problem of reducing vehicle cost to a competitive range. If US platinum consumption were to remain at its current level of 16% of annual world production, fleet conversion would require 146 years. These results imply that, without alternative catalysts, fuel cells alone cannot adequately address the issues facing the current system of road transport.

Fuel Cells and Precious-Metal Catalysts

The news article by Robert F. Service about fuel cells (“Energy,” 30 July, p. [682][1]) does not address an important problem associated with their mass use. Fuel cells require precious-metal (usually platinum) catalysts to operate at reasonable temperatures. But how much platinum—in great demand as an industrial catalyst—would be required for a world fleet of fuel cell-powered cars? Platinum has a crustal abundance of only 37 parts per billion ([1][2]), and total annual production of virgin platinum is less than 100 metric tons ([2][3]). If each fuel cell-powered car required only a gram of platinum (which, I think, is a low estimate), it would take 200 metric tons of platinum to power the U.S. fleet of cars alone. Although platinum can be recycled, world-scale fuel cell production for automotive and home use would probably require more than the entire annual production of virgin platinum. Because this metal is also an important industrial catalyst, demand would send the price of platinum through the roof. This would destroy any cost savings obtained from mass production of fuel cells and bring us right back where we are now—with fuel cells that are too expensive to be competitive in the mass market. 1. [↵][4]1. M. Winter , WebElements, available at [www.shef.ac.uk/chemistry/web-elements][5]. 2. [↵][6]1. N. N. Greenwood, 2. A. Earnshaw , Chemistry of the Elements (Pergamon, Oxford, 1984), ed. 1. p. 1328, 1331. [1]: /lookup/doi/10.1126/science.285.5428.682 [2]: #ref-1 [3]: #ref-2 [4]: #xref-ref-1-1 View reference 1 in text [5]: http://www.shef.ac.uk/chemistry/web-elements [6]: #xref-ref-2-1 View reference 2 in text

Speculative bubbles in precious metal markets — a suggestive model inspired by the 1986 platinum price development

Auf Edelmetallmärkten werden gelegentlich Preisentwicklungen beobachtet, die unter der Annahme rationaler Erwartungen in keinem Zusammenhang zu den zugrundeliegenden ökonomischen Fundamentaldaten stehen. Als Ausweg bieten sich stochastische Martingallösungen an. Dieser Ansatz wird in der vorliegenden Arbeit zur Erklärung der recht irregulären und scheinbar irrationalen Bewegungen des Platinpreises im dritten Quartal des Jahres 1986 herangezogen. Das Modell berücksichtigt insbesondere die maximal zulässige Schwankungsbreite für tägliche Preisänderungen, wie sie beispielsweise für Edelmetall-Termingeschäfte an der New York Mercantile Exchange vorgeschrieben ist.