Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14
Sheffield Roma Crisis School Place Application's Fraud Perfect Storm - 17th Oct 14
Stock Markets, Commodities and Indicators - 17th Oct 14
“Save Our Swiss Gold ” - Game Changer For Gold? - 17th Oct 14
How to Trade the Ebola Stock Market Sell-Off - 17th Oct 14
When... Not if... Crude Oil Price Drops Below $70 - 17th Oct 14
Either You're The Butcher or You're The Cattle - 17th Oct 14
Gold Benefits from Market Uncertainty - 17th Oct 14
Stock Market Pullback Underway, Euro downside, Commodities - 17th Oct 14
Stock Market Seven Year Cycle and A Correction Ahead? - 17th Oct 14
Three Ways to Play Uranium: Top Stock Picks - 17th Oct 14
America Flirts With Deflation - 17th Oct 14
Why the Fed Should Consider Delaying the End of QE - 16th Oct 14
Gold Prices Since 9-11 - 16th Oct 14
The Inflation Imputation, Dear Saver, May You RIP - 16th Oct 14
Flight To Safety - Gold Rises As Stocks, European Bonds Sink - 16th Oct 14
The March Of History And The End Of Nations - 16th Oct 14
Stocks Bear Markets Move Fast and Are Intensely Emotional - 16th Oct 14
Stocks Got Their Piece – Now It’s Our Turn - 16th Oct 14
Why This Stock Market Selloff Is the Next "Buy the Dip" Opportunity in Stocks - 15th Oct 14
Possible Stock Market Runing Correction - 15th Oct 14
Get Your Tactics Ready for the Ebola Stock Market Event - 15th Oct 14
Secret Scheme To Manipulate Silver Price - Lawsuits Against Banks Proceed - 15th Oct 14
Stocks Bull Market Over? Trend Forecast to End Jan 2015 - Video - 15th Oct 14
Stock Market Dow The Contrarian Play - 15th Oct 14
The Ukraine, As We Know It, Is Gone Forever - 15th Oct 14
We Can Police the Dark Web / Bitcoin - 15th Oct 14
The Safest Stocks in the World - 14th Oct 14
Building an Ark: How to Protect Public Revenues From the Next Financial Meltdown - 14th Oct 14
9 Ways to Retire Rich - 14th Oct 14
Silver, Warfare and Welfare - 14th Oct 14
Swiss Gold Referendum “Propaganda War” Begins - 14th Oct 14
What Happened To The Fourth Estate? - 14th Oct 14
How To Blow Up OPEC In 3 Easy Steps - 14th Oct 14
Investment Myth - Wars are bullish/bearish for Stocks - 14th Oct 14
Powerful Reversal and Shakeout in the Junior Gold Mining Stocks at May Lows Around $33 - 13th Oct 14
When The Economy Went Ponzi - 13th Oct 14
Stock Markets Get Ugly – and May Be Getting Uglier - 13th Oct 14
Cycle Failures Point to a Stock Market Correction - 13th Oct 14
Bill Ackman: I'm not a Crybaby Shareholder - 13th Oct 14
U.S. and World Stock Markets Chartology - 13th Oct 14
Stock Market Intermediate Downtrend Confirmed - 13th Oct 14
Gold and Silver Price To Rally Or Not To Rally - 13th Oct 14
Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - 12th Oct 14
Has Obama Changed His Mind About Syria? - 12th Oct 14
New Zero Bound Only Game In Town - 12th Oct 14
The 5–Year U.S. Treasury Bond is Emblematic of Careless Risk Taking in Bond Markets - 12th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Why You Can Bet on Platinum Prices Going Higher

Commodities / Platinum Feb 20, 2013 - 04:24 PM GMT

By: Money_Morning

Commodities

Jeff Uscher writes: Platinum prices, which have been below gold prices since mid-2011, are once again higher than the yellow metal, and the spread's widening.

Platinum was trading around $1,674 an ounce Friday, while gold was down around $1,605.


Platinum prices have been climbing since the start of the year as industrial activity and automobile production have picked up in the U.S. and in China.

The white metal has also been given a boost by new restrictions on platinum ore exports by the government of Zimbabwe and the closure of several mines in South Africa.

With production down and demand rising, many analysts expect platinum prices to continue to rise.

Gold, on the other hand, continues to consolidate after hitting an all-time high in the fall of 2011.

Historically, platinum has usually traded at a small premium to gold. For most of the period from 2000 until the financial crisis of 2008, platinum traded at a premium of 50% to 100% over gold, occasionally spiking even higher.

However, as platinum and other platinum group metals (palladium and rhodium) became widely used in catalytic converters, demand for these metals has skyrocketed and so have prices.

This makes now a good time to be investing in platinum.

Demand for Platinum Group Metals
The resurgence of car and truck demand in the United States and China has increased demand for platinum group metals for use in catalytic converters.

According to Johnson Matthey, a leading refiner of precious metals, industrial uses excluding catalytic converters make up about 30% of total platinum demand. Catalytic converters for the auto industry use 33% of the world's platinum while jewelry accounts for 29%. The remaining 8% is made up of platinum coins, bars and ingots used for investment purposes.

Demand is particularly strong in China, where air pollution has gotten so severe that it has finally gotten the attention of the State Council, China's highest political authority.

The South China Morning Post reports the Chinese government is pressuring state-owned oil refiners to refine and distribute gasoline and diesel fuel that meet strict emissions standards.

High-temperature gasoline engine exhaust allows the use of cheaper palladium in catalytic converters. Diesel engines burn a lot cooler. Only expensive platinum will work in diesel catalytic converters.

As China begins to replace its aging fleet of high-emission diesel trucks with low-emission trucks designed to burn the new, low-emission fuels, platinum demand will rise.

But China is not the only market where demand for diesel engines could increase.

Diesel engine cars and light trucks are slowly becoming more popular in the United States because of high fuel prices and diesel's greater fuel efficiency.

General Motors Co. (NYSE: GM) introduced a diesel-powered Cruze at the Chicago Auto Show last week and Chrysler has introduced a diesel Jeep. And one in five cars sold by Volkswagen AG (VLKAY) in the U.S. has a diesel engine.

All of this boosts demand for platinum.

Supply-Side Worries Affecting Platinum Prices
South Africa, Russia and Zimbabwe are the world's three largest suppliers of platinum group metals.

Strikes and other labor unrest by miners in South Africa and higher taxation by the government have caused the largest platinum miner, Anglo American Platinum (AGPPY), to close some of its South African mines.

In neighboring Zimbabwe, the government has banned the export of platinum ore and has given miners there two years to build platinum refineries in an effort to boost the value added to platinum exports.

On Wednesday, the government expropriated land owned by Zimplats, the biggest platinum miner in Zimbabwe, which may affect the company's expansion plans.

Investing in Platinum
Fortunately, there are some alternatives for investors looking to own platinum.

The ETFS Physical Platinum Shares (NYSE: PPLT) offers a way for investors to own physical platinum without actually taking possession of the metal. For those interested in palladium, the ETFS Physical Palladium Shares (NYSE: PALL) makes a good alternative.

Stillwater Mining Company (NYSE: SWC) mines platinum group metals, including platinum and palladium, at its mine in Montana. The company also mines platinum group metals in Ontario, Canada, and has other mining properties in Argentina.

Impala Platinum Holdings (IMPUY) also trades in the U.S. but it is the operator of Zimplats in Zimbabwe and should probably be avoided until the Zimbabwean government finalizes its export and expropriation policies.

Source :http://moneymorning.com/2013/02/15/why-you-can-bet-on-platinum-prices-going-higher/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 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

Free Report - Financial Markets 2014