Yes, currently, AIR is a speculative play. Still, given management's experience and track record, deposit location, and intiial drill results, it's only a matter of time before AIR takes off. https://www.wsj.com/articles/platinum-jumps-on-inflation-concerns-propelled-by-broader-rally-11613137081?mod=lead_feature_below_a_pos1
Platinum prices have neared their highest level in six years, driven by concerns about inflation and a sweeping rally in financial markets that has powered assets from stocks to oil and bitcoin higher.
Most actively traded platinum futures have risen about 17% in 2021 to $1,259 a troy ounce, outpacing most other precious metals. Since their nadir in March last year, platinum prices have more than doubled.
Money managers have started pouring funds into platinum, in part because the metal is seen as a store of value at a time when investors expect government spending to lift inflation. Precious metals are often viewed as a hedge against rising consumer prices. After a run-up in the price of gold last year, some investors have turned to platinum as a cheaper alternative.
“It’s a well-kicked dog that’s getting up,” said R. Michael Jones, chief executive of Platinum Group Metals Ltd., which is developing a palladium, rhodium and platinum mine in South Africa.
Platinum’s comeback initially kicked off with a rebound in industrial consumption of precious metals. It has now been caught up in a broader surge across asset classes, powered by investors who are piling into rising markets in the expectation of further gains.
This upswing, which has come to be known as the “everything rally,” has been fueled by low interest rates and forecasts for a global economic rebound, and prompted concerns that there may be a jarring decline at some point. There are concerns that assets such as platinum and bitcoin are vulnerable to sudden drops when sentiment shifts, but no one knows when a pullback might occur.
Platinum remains cheaper than gold—which fetches $1,823 a troy ounce—as well as palladium and rhodium. That has increased its allure for investors looking to precious metals as a form of insurance against rising prices in the broader economy.
Inflation is well below the 2% pace the Federal Reserve is aiming for. But a measure of how fast bond investors expect prices to rise, known as the 10-year break-even rate, has climbed on the prospect of a $1.9 trillion stimulus plan.
The price of gold, which is also widely seen as a hedge against inflation, has fallen about 4% this year. It surged 24% in 2020, its biggest advance in a decade. The metal, which attracts investor attention when interest rates fall, has lost momentum due to a rise in government bond yields and a decline in political uncertainty following the presidential election.
There are some telling signs that the demand from money managers for futures and exchange-traded funds tied to platinum has been strong. Among speculative investors, bullish positions in platinum futures outnumber bearish positions by the biggest margin since last February, Commodity Futures Trading Commission data show. ETFs backed by platinum owned 3.9 million troy ounces of the metal at the end of January, up from 3.4 million a year earlier, according to the World Platinum Investment Council, an industry group. “We have seen investors who have owned gold for years recently moving into platinum for the first time,” said Trevor Raymond, research director at the group. Some moved into the market when gold prices rose to record highs last summer, he added.
For platinum, the rally marks quite a turnaround. The market has languished due to a slowdown in sales of diesel-powered cars following the 2015 Volkswagen AG emissions scandal.
One of platinum’s main uses is in catalytic converters that help to strip pollutants from autos that run on diesel. Another precious metal, palladium, is favored for gasoline engines. Demand for both metals could suffer if the adoption of electric vehicles, which harness different materials including cobalt and lithium, gathers speed.
Investors are also betting that platinum will be in high demand if hydrogen-fuel technology becomes widespread, even if that is some years away.
“It looks like it’s the start of a supercycle for metals in general, and especially for green metals,” said Harry Barr, chairman and chief executive of New Age Metals Inc., which is developing a platinum-group metals project in Ontario, Canada.
Giving prices an extra boost, sales of platinum to car makers and sectors such as the glass industry have picked up in recent months. That has lifted demand at a time when disruption at South African mines and processing facilities, including a series of outages at an Anglo American Platinum Ltd. plant, has curtailed production.
Unlike palladium and rhodium, there is no shortage of platinum. Without demand from investors, the market would have been in a surplus last year, according to Emma Townshend, an executive for corporate affairs at Impala Platinum Holdings Ltd. , a South African miner. Although there is some tightness in the market for platinum ingots sought by investors and jewelers, platinum sponge that is used for industrial purposes is abundant, she said.