You might have been among the investors unloading platinum and palladium over the last few weeks as a pair of exchange traded funds (ETFs) pushed prices higher. But a round of new fundamentals favoring the metals may have you rethinking that.
After ETF Securities‘ popular funds launched, platinum and palladium prices surged to highs:
Graphic courtesy of the Wall Street Journal.
And get ready: there’s another platinum-backed ETF in the hopper from the provider, which would be a basket of precious metals that include gold, silver, platinum and palladium. For that reason, prices for platinum and palladium are likely headed higher in the longer term, says Matt Whittaker for The Wall Street Journal. [Other Metals Sparking Interest.]
The metals markets are hot right now, and even as gold prices climb, the demand for platinum and palladium is still high even when you discount the existence of these ETFs. The supply-and-demand chain is favoring fundamentals behind the metals, which are used primarily by the auto industry for catalytic converters. Auto sales in February revealed that many automakers had improvements in their sales.
There are also narrow supplies and production issues in South Africa, which is one of the world’s foremost platinum producers. [What’s Driving Platinum and Palladium Prices?]
At more than $1,500 an ounce, platinum is well above the lows it hit in 2008, when it dropped below $800.
For more stories about platinum, visit our platinum category.
- ETFS Physical Palladium (NYSEArca: PALL)
- ETFS Physical Platinum (NYSEArca: PPLT)
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.