Gold is the squeaky wheel that gets the grease, but platinum and palladium exchange traded funds (ETFs) haven’t exactly been chopped liver.
In fact, a new 2010 high for platinum was reached last week. A few factors have contributed to the gains seen in platinum and palladium in recent months:
- South Africa said production of platinum group metals rose 46% in September as price gains spurred output and after a labor strike at Impala Platinum Holdings Ltd. cut shipments in 2009, Carli Lornes for BusinessWeek reports.
- South Africa is expanding extraction of the metal as an increase in demand from auto and jewelry makers boosts prices. The country has about 75% of the world’s reserves.
- Palladium is getting a boost from demand, too, rallying 75% this year. Sara Grillo for Business Insider reports that palladium is rarer than gold or platinum. [Gains In Store for Platinum and Palladium ETFs?]
- Jason Scott for Bloomberg reports that platinum for immediate delivery has surged as high as $1,808.50 an ounce, the highest level since July 2008. With a triple threat of investment demand, ETF demand and industrial demand, platinum group metals could be poised for even more. [Getting Exposure to Metals With ETFs.]
If you’ve become skeptical of the gold rally, platinum can be an appealing play as metals prices rise across the board. Platinum shares qualities with both silver and gold, so it has the potential to deliver the best of both worlds – safety, inflation protection and potential for returns – but do keep in mind price volatility as a result of their industrial uses. Both ETFs that trade the metals are physically-backed, so they seek to reflect the spot price:
- 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.