It has been suggested that the recent surge in platinum prices will not be a short-term phenomenon, as there is plenty of potential for long-term growth in the sector.

An article in the Financial Times suggests that there is a "plausible" expectation for long-term growth in the platinum market over the coming years due to the continued demand from two sectors in particular.

On the one hand, the continued development of emissions controls means that more firms are developing vehicles with highly efficient catalytic converters. These devices now account for more than half of all global production of platinum.

On the other hand, however, there is significant demand for platinum in the jewellery sector, particularly in China, where the precious metal has become increasingly popular among brides.

There are concerns that an exchange traded fund (ETF) set up for the platinum market would seriously damage the platinum jewellery market in particular, with consumers more willing to switch to white gold should prices rise too high.

Therefore, the introduction of an ETF could damage the market by pushing prices too high, suggests the Financial Times. The newspaper points to the experience of silver, which earlier this year saw the price of silver jumping by $6 on the introduction of an ETF in the silver market.

Platinum appears to have plenty of underlying strength without the introduction of an ETF, which many analysts are concerned will damage the market rather than make it stronger.

Ÿ Adfero Ltd