Things get worse for PGMs...

Amidst the chaotic PGMs market environment, Anglo American has decided to sell its controlling stake in Anglo American Platinum, famously known as Amplats. Anglo American as reduced its investment in Amplats from 66.7% to 19.9%, leaving room for some potential significant influence. Anglo American is not completely divesting from South Africa, but it is simply implementing its restructuring strategy of divesting or selling some of its historic assets. This follows after it exited from coal in 2021 and 2022. The group also made the decision to retain its investment in its subsidiary, Kumba Iron Ore which it owns a 69.7% of. The PGM sector has been struggling for a little over a year now and companies have been reporting lower and lower profits as a result of declining PGM prices, and this even resulted to Anglo retrenching approximately 3700 employees in the prior year alone.

Anglo announced that this demerger will be completed by June 2025 and it intends to eventually fully exit and sell its 19.9% stake that it currently intends to keep. The CEO of the group said that the demerger will mean that Amplats will focus on being an independent and competitive business in the PGM sector. Anglo will remain rooted in Southern Africa, with a primary listing on the JSE. Anglo American will no longer have any representations on the board of Amplats. This means they will not have any significant influence, resulting its remaining stake being an IFRS 9 investment (opinion). Please comment below on how you would recognise this deconsolidation in Anglo American's Pro-Forma journal entries (Accounting students I'm just excited about this part). Here's a highlight of Amplats' Financial distress The group's headline earning dropped from R11.76 billion in 2023 to R8.4 billion. Revenue decreased from R123.17 billion to R109 billion, with the rand basket per ounce decreasing from R30 165,35 per ounce to R26695 per ounce. Despite this, the group still declared a R3 per share dividend, which resulted in R800 million. The company declared a further R59 per share cash dividend from its cash reserves, totalling R15.7 billion. Update on Sibanye Stillwater

Sibanye has decided to pull out of its Rhyolite Ridge Lithium-Boron investment in the USA, as the expected investment returns will not reach its desired levels. In 2021, the project was announced as a joint venture, aimed at capitalising on the growth of lithium and boron as critical components in the battery manufacturing industry. Following the thorough review of the investment review received in October 2024, it decided to not continue with this investment due to the abovementioned reasons. Update on Impala Platinum

Impala has reported that the decline in metal prices has resulted in a 43% decrease in its half-yearly profit. It reported that its headline earnings fell from R3.26 billion a year ago to R1.85 billion for the 6-month period ending on the 31st of December 2024. Impala ended up not declaring any interim dividends, stating that it is due to the low cash generation that results from the low PGM prices. This is the second year in a row that it withholds its interim dividends. COINS NEWS Gold's analysis

The weekly chart shows that Gold opened this week with a bearing sentiment, with prices rejecting at the $2941.532 price mark, heading towards the strongest support level at the $2756.468 price level. However, the lower time frames always tell a better story. Let's look at the daily chart...

Gold's Daily chart

On the daily chart, we can see that the market actually opened on Monday with a bullish sentiment, wit bulls losing their power at the $2952.661 price mark, which proves to be a previous strong rejection level as prices have previously failed to break past that in the prior week. On Tuesday, the bears took over the market and Gold has been in a bearish sentiment, ever since. However, it is currently stuck on the previously strong support level, which indicates that Gold may be stuck in a consolidation between the $2952.661 and $2881.060. However, bears appear to be on a strong come back so I estimate that prices may push at least until $2747.933, which is the strongest previous support level. Now, let's check out the 4-hour chart for further details and pattern confirmation... Gold's 4-hour chart

This chart confirms that Gold is indeed in a consolidation between the abovementioned price levels. $2881.060 appears to be quite a stronger support level, as this chart reveals that bears have failed to break below the $2881.060 price level in the prior weeks. In this certain time frame, there is no definite trend as there seems to be a battle of power between the bulls and bears. Consequently, I would scale down even further to lower time frames to find my daily trade entries and scalp this movement. Such market sentiments can either make you a lot of money or result in you losing a lot of money. I would therefore buy at this current price and set my take profit for $2952.661 and just hold for the week and sell at the highest point.

NB: This is just my opinion and it doesn't constitute any financial advice as I am not a FSCA registered financial services provider to give such advice. Take it with a pinch of salt. That is all for this week, and thank you for reading. Please like, comment and share with as many people as you can!