Although governments in the industrialised world have attempted to curb outlays in order to get a grip on public finances, they cannot afford to ignore infrastructural investment needs. Emerging economies have even bigger requirements as they are starting from a lower base.
Last September we recommended reducing emerging markets (EM) exposure, expecting headwinds from rising U.S. Treasury yields, US dollar appreciation and the risk of a Trump victory. This proved strongly beneficial until late last year.
After suffering losses in the fourth quarter, the platinum price resumed its upswing in January 2017. It was supported by the depreciation of the US dollar and declining bond yields. This increased demand again for gold as a safe haven, which also had a positive impact on platinum.