Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Fed Quantitative Tightening Impact on Stocks and Gold - 22nd Sep 17
Bitcoin & Blockchain: All Hype or Part of a Financial Revolution? - 22nd Sep 17
Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms - 22nd Sep 17
Will North Korea Boost Gold Prices? Part I - 22nd Sep 17
USDJPY Leads the way for a Resurgent Greenback - 22nd Sep 17
Day Trading Guide for Dummies - 22nd Sep 17
Short-Term Uncertainty, As Stocks Fluctuate Along Record Highs - 21st Sep 17
4 Reasons Gold is Starting to Look Attractive as Cryptocurrencies Falter - 21st Sep 17
Should Liners Invest in Shipping Software Solutions and Benefits of Using Packaged Shipping Software - 21st Sep 17
The 5 Biggest Bubbles In Markets Today - 20th Sep 17
Infographic: The Everything Bubble Is Ready to Pop - 20th Sep 17
Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami That May Hit Us Within 10 Years - 20th Sep 17
Stock Market Waiting Game... - 20th Sep 17
Precious Metals Sector is on Major Buy Signal - 20th Sep 17
US Equities Destined For Negative Returns In The Next 7 Years - 3 Assets To Invest In Instead - 20th Sep 17
Looking For the Next Big Stock? Look at Design - 20th Sep 17
Self Employed? Understanding Business Insurance - 19th Sep 17
Stock Market Bubble Fortunes - 19th Sep 17
USD/CHF – Verification of Breakout or Further Declines? - 19th Sep 17
Blockchain Tech: Don't Say You Didn't Know - 19th Sep 17
The Fed’s 2% Inflation Target Is Pointless - 19th Sep 17
How To Resolve the Korean Conundrum  - 19th Sep 17
A World Doomed to a Never Ending War - 19th Sep 17
What is Backtesting? And Why You Need Backtesting System? - 19th Sep 17
These Two Articles Debunk The Biggest Financial Nonsense I See In The Media - 18th Sep 17
Bitcoin Price Crash 40% In 3 Days Underlining Gold’s Safe Haven Credentials - 18th Sep 17
The Sum of Risks – Global, Strategic, Political, and Financial - 18th Sep 17
The Netflix Of Canada’s Cannabis Boom - 18th Sep 17
Stock Market Sentiment Speaks: Either You Learn From The Events Of The Past Week, Or You Are Hopeless - 18th Sep 17
SPX 2500 … At Last! - 18th Sep 17
Inflation Lies, Lies and OMG More Lies - 18th Sep 17
How to Choose right Forex Trader? - 18th Sep 17
Who Has Shaped the World the Most? The Dozen Greatest Achievers - 17th Sep 17
Riding the ‘Slide’: Is This What the Next Stocks Bear Market Looks Like? - 17th Sep 17
Gold Up, Markets Fatigued As War Talk Boils Over - 17th Sep 17
Predicting the Future of the U.S. and the World - 16th Sep 17
Deceit in the Financial Food Chain - 16th Sep 17
Gold GLD ETF Investment Resuming - 16th Sep 17
Extreme Weather & Energy Markets: What's Next? - Video - 15th Sep 17
Trump’s Path to IP Wars - 15th Sep 17
GBP USD Approaches Fibonacci Target - 15th Sep 17
Higher US Interest Rates May Force Higher Inflation Rates - 15th Sep 17
Stock Market Investors: Taking the Road "Less Traveled" Has Its Perks - 15th Sep 17
The 3 Best P2P Lending Platforms For Investors In 2017—Detailed Analysis - 15th Sep 17
The US Debt Bubble Will Soon Warrant Serious Measures - 15th Sep 17
Why it is Often Difficult to Sell a House Fast - 15th Sep 17

Market Oracle FREE Newsletter

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

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

© 2005-2017 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