Platinum and palladium exchange traded funds (ETFs) may have seen their hiccups this year as the recovery falters, but analysts don’t think the metals will stay down for long.
A few reasons why:
- Miners are having issues, including production cost pressures, regulatory issues and labor concerns. According to Commodity Online, South African mines are facing labor issues and production difficulties, leaving the field wide open for U.S. mining companies.
- Newsday reports that analysts are predicting platinum and palladium prices to rise as demand increases along with the economic recovery. Platinum prices rose 19% in the first four months of the year, but failed to hold onto those early gains. Investment demand appears to be supporting the current price levels while the industry waits for demand from other sources to resume. [Is Platinum An Alternative For Gold ETFs?]
- Abraham Bailin for Yahoo Finance reports that continued supply shocks from major platinum and palladium exports could cause prices to skyrocket. Bailin says that if you’re looking for exposure to the metals because of their use in autos, platinum may be the better bet for now, although both metals are increasingly being mixed together to cut costs. [Did the World Cup Boost Platinum or Palladium?]
- ETF Securities Physical Palladium (NYSEArca: PALL)
- ETFS Physical Platinum (NYSEArca: PPLT)
Tisha Guerrero contributed to this article.
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.