Platinum Group Metals Ltd T.PTM

the game has changed for platinum

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The New Platinum ETF Could Be The Best Performer This Year
January 11th, 2010
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“Platinum group metals are positioned for a stellar year, with new investmentvehicles in the United States seen as a precursor to a wave of investmentbuying in anticipation of a recovery in industrial demand.The launch of platinum and palladium-backed exchange-traded funds on the New York market has given U.S. investors their first opportunity to invest in the metals via an ETF,” Reuters Reports.
“We think platinum will be the best performer this year,” said Daniel Smith, an analyst at Standard Chartered in London. “If you look at where we are in the economic cycle and where (mining) costs are as well in South Africa, platinum is quite a bullish story overall,” he said. “The U.S. ETFs are just adding fuel to the fire.”
ETFs have already proved a popular way to invest in gold. The largest gold ETF, the SPDR Gold Trust, is the world’s number six bullion holder ahead of China, Japan and Switzerland.
Ross Norman, director of TheBullionDesk.com, said if platinum group metals ETFs garner similarinvestment flows, they could attract some 3 million ounces in the next four-six years. This could have a stabilizing effect on the market, he said.
“Many producers and consumers see (ETF investment) as a third leg to the demand side,” he said, with such buying adding to industrial and jewelry demand.
“When prices are cheap, typically investors will buy and when they are expensive, they’ll sell,” he said. “So to an extent, they see it as a way of stabilizing prices.”
“The new U.S. funds, operated by a U.S. subsidiary of London’s ETF Securities, started trading on January 8 on the NYSE Arca platform of the New York stock exchange. An initial issue of 100,000 shares — each backed by a tenth of an ounce of the metal — was made prior to the launch of the platinum fund. Further shares will be issued on demand, and metal bought by the market maker to back them. U.S. traders expect the new ETFs to spark significant new investment flows,” Reuters Reports.
“Even if the new products have just a fraction of the success of the GLD, it puts a new demand quotient under the curve,” said Frank McGhee, head precious metals trader of Chicago-based Integrated Brokerage Services.
“Platinum is a small market,” he added. “Even a modest success puts a tremendous floor under the market.” In Europe, buying of platinum group metals-backed exchange traded funds boomed last year. ETF Securities more than quadrupled holdings of its London-based palladium ETF in 2009, while those of its London platinum product more than doubled.
The other major operator of precious metals ETFs in Europe, Zurich Cantonal Bank, said its platinum-backed product also more than doubled in size last year.
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ETFS Physical Platinum Shares (PPLT) To Begin Trading This Friday January 8th
The Securities and Exchange Commission approved a rule change in late December that allowing ETF Securities to proceed with the launch of the ETFS Physical Platinum Shares ETF (PPLT). Theinvestment objective of the Trust is for the Shares to reflect the performance of the price of physical platinum, less the Trust’s expenses. The Shares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in platinum. An investment in physical platinum requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal. Although the Shares will not be the exact equivalent of an investment in platinum, they provide investors with an alternative that allows a level of participation in the platinum market through the securities market.
ETFS Physical Palladium Shares (PALL) To Begin Trading Tomorrow January 8th
The Securities and Exchange Commission approved a rule change in late December that allowing ETF Securities to proceed with the launch of the ETFS Physical Palladium Shares ETF (PALL). Theinvestment objective of the Trust is for the Shares to reflect the performance of the price of physicalpalladium, less the Trust’s expenses. The Shares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in palladium. An investment in physical palladium requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal. Although the Shares will not be the exact equivalent of an investment in palladium, they provide investors with an alternative that allows a level of participation in the palladium market through the securities market.