Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Platinum is the Next Profit Opportunity in China's Commodity Boom

Commodities / Platinum Feb 13, 2013 - 05:01 PM GMT

By: GrowthStockWire

Commodities

Matt Badiali writes: Over the last month, I've shown you how China's economy has seen a resurgence in commodities imports like copper, iron ore, uranium, and coal.

China is the largest importer of industrial commodities in the world... So when its demand picks up, it's bullish for the sector.


Last week, I showed you the most compelling chart of all – China's monthly car sales are soaring again. And that's the launching pad for the next exciting installment of the commodity boom story...

I'm talking about platinum. And if you buy platinum assets right now, chances are good that you'll double your money over the next year or two.

Platinum is a "dual purpose" metal. It's used in jewelry... and it's considered a "store of wealth," so it serves as a precious metal like gold. But it's also an industrial metal. It is used to make catalytic converters – which reduce a vehicle's pollutants – and as a catalyst for refining gasoline and diesel fuel. Those two sectors account for 57% of the platinum produced per year. And demand is soaring...

China is the world's largest car market... and its sales were up 31% from July to December. Car sales in the U.S. – the world's second-largest car market – are the highest they've been in five years.

But while demand soars, platinum supply is in big trouble...

The metal is extremely rare... Unlike gold, which is mined on nearly every continent, 72% of the world's platinum supply comes from one volatile country: South Africa. Production in the country peaked in 2006 and has fallen 20% since. Thanks to mining strikes, aging, drying-up mines, and power-supply problems... platinum production fell 12% from 2011 to 2012 alone.

This is causing a big imbalance in platinum supply and demand. That should result in rising prices. But the market hasn't seemed to notice...



Thanks to economic troubles in the U.S., Europe, and China, platinum fell – along with the rest of the commodities market – in 2011 and 2012. Prices declined to $1,400 per ounce. And they have bounced between $1,400 per ounce and $1,700 per ounce since.

More importantly, platinum is trading at a discount to the price of gold.

Platinum has only fallen below the price of gold three times in the past 37 years. It historically trades at a 30%-70% premium to the price of gold. So based on history, platinum can't stay this cheap for long...

As the global economy continues to recover – and automobile consumption increases along with it – we should see platinum prices rise at least to their long-term average of 30% above the price of gold. That would put the platinum price around $2,200 per ounce today.

The fundamentals look ripe for a huge move higher. But until that happens, the market is giving us an incredible opportunity to take advantage of these dirt-cheap prices...

One of the best ways to do so is through shares of the Sprott Physical Platinum and Palladium Trust (NYSE: SPPP). SPPP is a new platinum fund formed by famed resource investment management firm Sprott Asset Management. And it gives you exposure to physical bullion – without involving the banks.

This fund has an extra benefit for U.S. investors... If you hold the units for at least one year, gains you make on your investment are only taxed at a maximum of 20%. That is well below the 28% tax on most bullion investments.

So far, 2013 is offering us far more commodity investing opportunities than we saw last year. Platinum is the next exciting installment. I hope you take advantage.

Good investing,

Matt Badiali

http://www.growthstockwire.com

P.S. Platinum is one of the cheapest investments you can make anywhere in the resource sector right now. So in the most recent issue of my S&A Resource Report, I introduced readers to one of the best ways to play it. If things go right with platinum prices and this miner's projects, we could easily double our money in 2013. To learn more about the S&A Resource Report – and access this brand-new report – click here.

 

The Growth Stock Wire is a free daily e-letter that provides readers with a pre-market briefing on the most profitable opportunities in the global stock, currency, and commodity markets. Written by veteran trader Jeff Clark, and featuring expert guest commentaries, Growth Stock Wire is delivered to your inbox each weekday morning before the markets open.

Customer Service: 1-888-261-2693 – Copyright 2009 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Growth Stock Wire Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife