A platinum-related exchange traded fund surged back above its short-term trend line Monday as the ongoing market volatility pushed investors to safe-haven precious metals and bargain hunters jumped on the cheaper value in the white metal.
The ETFS Physical Platinum Shares (NYSEArca: PPLT) rose 3.4% Monday and broke back above its 50-day simple moving average while the platinum spot price was 3.2% higher to $859.5 per ounce.
PPLT broke down to an all-time low last week after the precious metal tripped to a seven-year low of $806.3.
Platinum, along with other precious metals, rallied Monday on safe-haven demand as the equities market weakened on concerns over the global economy and the continued decline in oil prices.
Moreover, the precious metals group may have been gaining strength on increased speculation that the Federal Reserve may push off on rate hikes until later this year due to the increased volatility and economic uncertainty.
“In particular, given the events of the last few weeks and the data we’ve gotten, I think that makes it even less likely,” Gus Faucher, senior economist at PNC Financial Services Group, told Bankrate.
While the metal commodities are a good store of wealth, the assets are less attractive in a rising rate environment since they do not provide a yield.