Posted November 03, 2021
By Aaron Gentzler
Chip Shortage Flips the “Switch”
If your kid or grandkid has a new Nintendo Switch game console on his holiday wish list, consider shopping early this year. As in, before Black Friday.
"The supply and demand of semiconductor parts is tight, and is affecting Switch production,” says a Nintendo spokesperson. “We are assessing the impact.”
According to Reuters: “Chip shortages are throwing the production plans of global electronic makers into disarray.” More specifically? “Nintendo Co. will make 20% fewer Switch games consoles.”
The semiconductor shortage is also influencing prices of precious metals; you might find its impact surprising…
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Your Rundown for Wednesday, November 3, 2021...
Precious Metals and the Global Chip Shortage
“Analysts and traders have sharply lowered their price forecasts for platinum and palladium after a chip shortage forced automakers to cut production of vehicles containing the metals,” says Reuters.
Which makes sense, considering automakers comprise about 40% of platinum and 80% of palladium demand.
“[The chip shortage] helped drag platinum prices from a seven-year high of $1,336.50 an ounce in February to as low as $901.30, while palladium dropped from an all-time peak above $3,000 an ounce in May as far as $1,841.93.”
Both metals have reversed some losses: platinum’s trading around $1,028 per ounce and palladium around $2,038, “but further gains will be limited, the poll of 27 analysts and traders this month found,” Reuters reports.
On average, the Reuters poll found analysts forecast platinum at $1,000 through the end of the year -- climbing to $1,110 in 2022 -- with palladium projected at $2,050 through 2021 and $2,150 nex year.
“Demand should improve as the chip shortage eases and car makers may even overproduce to replenish stockpiles when they can -- potentially lifting prices.”
But as EVs wipe out the combustion engine (eventually), palladium’s expected to get crushed… while the outlook for platinum -- which is less dependent on the auto industry -- should improve.
Market Rundown for Wednesday, Nov. 3, 2021
S&P 500 futures are down 5 points to 4,615.
Oil’s down 3% to $81.23 for a barrel of WTI.
Gold is down almost 1% to $1,772.70 per ounce.
Bitcoin’s down 1.6% to $62,423.
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Check back Friday… Until then, take care!
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