Will Central Banks Buy and Sell PGM’s to Control Prices?

Mineweb’s Kip Keen commented on a recent announcement that Sergei Donskoi, Russia’s Minister of Natural Resources, suggested that South Africa and Russia buy platinum and palladium through their central banks to exert some control over metals prices. The author ran a “what if?” scenario past Harry First, a law professor at the New York University School of Law with a special interest in international anti-competition issues.

As quoted in the publication:

In short: What if Russia and South Africa decided to prop up prices during platinum and palladium down-cycles (like now) through central bank purchases, assuming the two countries had the political will to tackle what would be a fraught price control device, both logistically (think: transparency, timing) and politically (think: unions, for example, that would want a buy-buy-buy policy. But to what end?)

“My initial reaction is they could probably do it,” First said, putting it in the same vein as OPEC survival.

But it would be complicated, he agreed, for the platinum-palladium price partnership to stand in the face of stiff resistance from other governments, the sectors that depend on its metal and the public.

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