Platinum Price Set to Hit $2,000 Within Six Months

The price of platinum is set to reach $2,000 an ounce within six months as global economic recovery lifts demand for vehicles, industrials group Johnson Matthey forecast in a study published on Monday.

The precious metal is used to make catalytic converters, as well as in the manufacture of jewellery.

"With positive supply-demand fundamentals and continuing global economic growth, platinum could trade as high as $2,000 in the period," Johnson Matthey said in its 2011 review of the metal.

"If interest rates in key markets remain low, speculative investment interest should also support platinum's price.

"Although external shocks such as oil price rises or negative sentiment surrounding sovereign debt could once again prove to be a drag on the price, strong physical buying in China is likely to give support during price dips, meaning platinum is unlikely to fall below $1,750," it forecast.

Demand for platinum in autocatalysts had already risen 43 percent to 3.13 million ounces last year as the global automotive sector bounced back from a poor 2009, said Johnson Matthey.

On Monday at the end of European trading, the price of platinum stood at $1,765 an ounce.