Skip to comments.According to Barry Stuppler Platinum has a Golden Future--03-15-2012
Posted on 03/15/2012 9:43:35 AM PDT by appeal2
Barry Stuppler, veteran precious metals investor and dealer said back in October that Platinum was a screaming buy. For good reason. Platinum's price had dipped below the price of gold, for only the fourth time in the post WWII era. Of course the Platinum market is extremely small compared to others, but it is an extremely important industrial metal that also has some investment attributes. Sure enough, Platinum closed out the year at around $1400 and in no time at all has surpassed gold. Platinum has been the best performing metal so far this year. Today, Thursday, 3/15/2012 it's at $1674 per ounce.
There's a number of factors adding to Platinum's rise. Labor unrest in South Africa (the largest producer), increased auto sales, jewelry demand in Japan, and the Canadian Mint's reintroduction of Platinum Maple Leafs. If these factors continue in force, we could see record increases in Platinum prices and for that reason Barry believes it has a golden future.
Listen to the Interview Here
I don’t agree with this, which doesn’t mean anything one way or another.
Yes, it is true that Pt is almost 10x more rare then gold and chemically more difficult to refine, so why they should trade at roughly the same price (now) is baffling. So...is Pt too low or gold too high?
The main driver of Pt uptake has been cat converters for vehicles for many years now. Automakers have in general figured out how to use palladium which is quite a bit cheaper, but still a rare metal. In addition, palladium has the interesting property that it will absorb many hundreds of times its mass in hydrogen. So there is some thought that Pd might become more desirable as a storage medium for hydrogen in fuel cells. Ehhh, nobody can predict the future.
But to say that just because Pt has almost always traded quite a bit higher than gold that it will return to that status is a nice piece of history, but to me, an invalid investing thesis. I question the forward-looking demand.
Interest rates have started to rise, the ten year up to ~~2.25% from sub 2% mere days ago. This is ominous for PM investors, as it indicates a stronger dollar, at least in the short term. And gold has been smoked for $100 over the past few days.
And by the way, if you think the buy-sell spreads for gold are punitive, wait until you screw around with platinum.