A long-anticipated physically backed platinum exchange traded fund (ETF) inched a little closer to becoming a reality after the Securities and Exchange Commission (SEC) approved some key rule changes.
The launch of the ETFS Platinum Trust and the ETFS Palladium Trust got a step closer as the SEC approved proposed rule changes from NYSE Arca for listing and trading of these ETFs. According to Allen Sykora for The Wall Street Journal, the market took this approval as a green light for the launch of these ETFs, even though no official launch date has been announced. [Other Ways To Play Platinum.]
These new precious metal ETFs will likely spur demand in both platinum and palladium for the same reasons that ETFs have done so in the gold and silver markets. Both platinum and palladium will be put into storage to back their respective ETF shares, which are constructed to track the price movements of the precious metals. [ETFs for other metals.]
The timing of such an ETF could be good: platinum prices have been steadily climbing back after having lost half its value in 2008. One analyst feels that if gold prices remain elevated, then platinum could approach $1,550 an ounce within the next six months. On the flip side, if the dollar gets strong or investors sell off gold, platinum could drop to $1,280 an ounce. Right now, platinum is around $1,474 an ounce, reports Fin24.
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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.