Platinum: The Precious Metal You Don’t Want to Ignore

Friday, 16 May 2014
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Published in Gold Investing
Platinum: The Precious Metal You Don’t Want to Ignore PhotoDune.
While gold continues its stubborn defiance of a $1,275-per-ounce downside and awaits a failure of the Fed’s paper-priming strategy before it explodes, platinum, gold’s distant cousin, continues to show uncommon strength. Often acting in concert with gold as a safe-haven asset, platinum is more subject to the pull of market demand.

Positive-Pullback

It has climbed 7% this year, mostly on the interruption of supply from South Africa and fear that trade sanctions might be slapped on Russia. Since platinum and sometimes palladium are both used to retard the action of pollutants, their price demands are particularly influenced by global automobile sales. In the first quarter of 2014, combined auto sales for the United States, Europe, and China have been up by 6%. This is a particularly significant figure for China, since it has evolved from its bicycle age, and stands to exhibit a more acute consumer need for automobiles in the near future.

Platinum is likely to be ignored by investors — but for those looking for a combined safe-haven and jolt for their portfolios, it’s a precious metal you absolutely shouldn't ignore.

Platinum strikes in South Africa will soon enter their 17th week. This extended action will necessarily erode above-ground inventories. The current price of platinum is $1,466 per ounce based on the Friday, May 16th close. It wouldn’t be unusual if the combined effects of Russian sanctions and South African strikes drove the price to the mid-1500s level.

Traditionally, platinum is thinly traded on the futures market, and is likely to be ignored by investors. But for those looking for a combined safe-haven and jolt for their portfolios, it’s a precious metal you absolutely shouldn’t ignore. The auto industry is unlikely to find a substitute for platinum soon; and global auto sales should continue to provide a reassuring floor for the white metal’s price.

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