Platinum: The New King in the World of Precious MePlatinum: The New King in the World of Precious Metals
After a year in which everyone seemed to be backing thetruck up for gold, investors are turning their attention to platinum andpalladium, outperformers versus gold and silver in 2009 (gold +24%;silver +49%; platinum 56%; palladium +117%) that continues to offerbetter prospects for price appreciation. www.FinancialPost.com;By: David Pett; Words: 508
In further edited excerpts from the original article* Pett goes on tosay:
This year, analysts expect precious metals to keep rising, withplatinum group metals and silver again forecast to outperform gold.
2010 Forecast for Palladium: +50%
Palladium will rise 50% to an average of US$434 an ounce according to anew poll from Thomson Reuters.
2010 Forecast for Platinum: +29%
Platinum is expected to surge 29% to an average of US$1,553.75 an ouncein 2010.
2010 Forecast for Silver: 24%
Silver is forecast to jump 24% to an average price of US$18.50 in 2010.The economic cycle will boost demand for industrial usage.
2010 Forecast for Gold: +13%
This year is shaping up nicely as well for gold, with forecastspredicting gold will average US$1,150.50 an ounce this year, accordingto Thomson Reuters data.
Whyso Strong in 2010?
Most precious metals are benefiting from a low interest rate environmentdue to accommodative monetary policy, a growing U.S. deficit that isplaying havoc with the U.S. dollar and lastly, the growing concernsabout inflation as government stimulus fuels the economic rebound.
Uses for Platinum and Palladium
In addition to being used as a reserve currency in the same manner asgold and silver, demand for platinum and palladium is being aided by itscommercial utility — namely in the rebounding automotive sector thatabsorbs about 30% of the total world supply for the production ofcatalytic convertors and more recently fuel cells in electric cars.Other applications include electronics, petroleum, glass and of coursejewellery.
Supply Problems
Power outages that have plagued platinum and palladium production inSouth Africa, where 80% of global output takes place, has exarcerbatedthe persistent demand/ supply imbalance that since 1997 has seen demandoutstrip supply by roughly nine billion ounces. As such, unlike silverand to a lesser extent gold, platinum can be hit by a supply squeeze atany time. With demand also growing the situation suggests platinumprices could skyrocket.
Canadian Platinum Funds
In addition to the new exchange traded funds south of the border, thereare few Canadian-based funds that invest in physical platinum. Thosethat do, like the BMG Bullion Fund, hold equal weight in gold and silveras well.
Platinum Stocks
Pure play platinum stocks are always another option for investors,however. Onno Rutten, a UBS analyst, thinks share performance in 2009already reflects platinum price forecasts. His top pick in the space isTSX-listed Eastern Platinum Ltd. (ELR/TSX), rated “buy” with a $1.35price target.
U.S. ETFs
In January two exchange-traded funds were launched in the United States:ETF Securities Physical Platinum Shares (PPLT/NYSE) and PhysicalPalladium Shares (PALL/NYSE).
*https://www.financialpost.com/personal-finance/fp-investing/story.html?id=2493253
Editor’s Note: The above article consists of editedexcerpts from the original for the sake of brevity, clarity and toensure a fast and easy read. The author’s views and conclusions areunaltered. (editor@MunKnee.com)