The announcement on 18th September that the US Environmental Protection Agency had issued a Notice of Violation of the Clean Air Act against German car maker VW for misleading emissions test with their diesel cars resulted in the price of platinum dropping by almost 10% over the next 10 days to $900 per oz. Platinum is used to make catalytic converters for diesel cars, so investors worried that the scandal could hasten the decline in diesel use and in turn demand for the precious metal.
Since the start of October platinum prices have rebounded to almost $950 per oz, just $10 per oz lower than the metal was traded at just days before news of the scandal broke. The impact of the scandal might not be as bad as feared, certainly for platinum demand. Indeed, lower platinum prices could trigger a swing back to platinum for gasoline auto-catalysis, which is currently largely the preserve of palladium, another platinum-group metal (PGM).