OCBC expands precious metals app offerings to include platinum and palladium

Singapore's second-largest bank OCBC has expanded its precious metals offering on its mobile app to include platinum and palladium bullion.

Announcing this in a media release on Tuesday (Aug 11), OCBC said this will provide its retail customers with a lower entry point and greater choice to diversify within the asset class.

"These new additions build on the bank’s existing digital gold and silver capabilities, which have been available to retail customers since October 2021," it said.

Prior to OCBC's move, the two precious metal types, despite being globally traded, were limited to affluent customers.

OCBC's mass retail customers can now invest in platinum and palladium bullion digitally from as little as 0.01 ounces, priced at about S$23 for platinum and S$18 for palladium as of Aug 7.

Head of OCBC's group wealth management, Tan Siew Lee, said in a statement that the bank is strengthening its position as a leading wealth management player and as the go-to bank for precious metals.

"By combining fractional investment with a seamless digital experience, we have lowered the precious metals investment barrier to entry for all our customers," Tan added.

However, she also cautioned retail investors that both platinum and palladium are high-beta metals. 

"Investors who are willing to tolerate higher volatility may find in them a unique way to gain exposure to themes that sit at the intersection of industrial activity, resource scarcity, and the evolving global energy transition," Tan said.

Demand driven mainly by industrial applications

Unlike gold, with its demand driven by its role as a currency-neutral store of value asset and by central bank buying for reserves, platinum and palladium derive a significant portion of their demand from industrial applications.

Platinum is widely used in automotive manufacturing, hydrogen fuel cell technologies and industrial processes, while palladium plays a critical role in vehicle emissions-control systems.

Demand for these metals is closely linked to developments in the automotive, industrial and clean energy sectors.

Combined with the concentration of global supply in a handful of countries, these factors can drive price movements that differ from those of gold and silver, exposing investors to a broader set of market influences, OCBC said.

Its research arm forecasts spot prices of platinum and palladium to exceed US$2,000 (S$2,558) and US$1,500 respectively by the first half of 2027, up from US$1,883 and US$1,389 as of end-June.

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editor@asiaone.com