Silver exchange traded funds (ETFs) are on the rise, thanks to a weakening dollar. Platinum, dinged by the auto industry, could be getting a new lease on life. How can you take advantage?
The fact that silver prices are moving in an upward direction are positive signs that the markets may be, too. This also indicates that consumption may be mending and ready to rebound. Another benefit of going to silver is that it’s cheaper than gold, but no less useful as an inflation hedge.
Silver can be targeted with the iShares Silver Trust (SLV), which holds gold bullion and is up 37.1% year-to-date.
Meanwhile, the auto industry has left depressed marks in many areas of the markets, and platinum is one metal that has fallen off in demand along the way. Platinum is mainly used in autocatalysts to clean exhaust fumes from vehicle emissions, which accounts for 60% of the metal’s total demand, reports Frank Tang for Reuters.
Recent proposals for a U.S.-listed platinum ETF would give the metal a lift and fill up some of the tamped-down demand. Recent interest had led to ETF Securities filing with the Securities and Exchange Commission (SEC) for the first platinum and palladium trusts available in the United States. ETFs back each security issued with physical stocks of a given commodity. They are listed on stock exchanges and offer investors exposure in the underlying commodity without taking delivery.
The potential upside for platinum is great, with the economic recovery spurring demand for the metal once the auto industry resumes normal operations. Platinum has been trading down about half of its $2,290 per ounce record set in March 2008.
One way to access platinum in the United States right now is through an exchange traded note (ETN):
- E-TRACS UBS Long Platinum ETN (PTM): up 26.9% year-to-date
For full disclosure, some of Tom Lydon’s clients own shares of SLV.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.