Platinum exchange traded funds are outperforming gold prices so far this year after lagging the yellow metal badly in 2011. At the same time, platinum ETFs have broken above the 200-day moving average, and investment demand may drive prices on the white metal even higher.
ETFS Physical Platinum Shares (NYSEArca: PPLT) is up about 18% year to date, compared with gains of roughly 12% for major gold ETFs. The platinum fund lost over 20% in 2011.
Paul Walker, the global head of precious metals at GFMS Thomson Reuters, said that platinum prices have been heavily influenced by investment inflows, despite a five year surplus in the white metal, reports Allan Seccombe for BusinessDay. [Platinum, Palladium ETFs Look to Bounce Back]
Platinum has brought in annual investment inflows of $1 billion to $2 billion, Walker noted.
“If you really want to understand the price action … you’ve got to take a call on what you think the investment universe is going to do,” Walker said. “I think the primary causal factor for all of this is what has happened to real interest rates.”
OAO GMK Norilsk Nickel, the world’s largest palladium producer, stated that platinum group metals’ investments could exceed that of gold, reports Carli Lourens for Bloomberg.