Gold’s Demise Pushes Platinum ETFs to New Lows

Gold and silver are not the only downside offenders in the precious metals complex. Platinum, which is pricier than gold, has been savagely repudiated in recent weeks as well.

The ETFS Physical Platinum Shares (NYSEArca: PPLT) slumped 1.1% Wednesday, joining more than 40 other exchange traded funds in the new all-time low club. PPLT, the lone U.S.-listed exchange traded fund backed by physical platinum holdings, is off nearly 3% in the past month. That is better than the 5.4% lost by the SPDR Gold Shares (NYSEArca: GLD), though that is not saying much.[Precious Metals ETFs Lose Their Shine]

What is ominous is that platinum has continued declining after hitting a five-year low early last month, prompting outflows from platinum ETFs listed outside the U.S.

“According to Societe Generale, outflows from exchange-traded funds have occurred. South African production has ramped up from a strike faster than expected, and there is a realization existing above-ground stocks may be more than once thought,” reports Shanghai Metals Market.

South African labor strife was an important catalyst in lifting palladium and platinum prices earlier this year. While the country has a history of mining labor strikes, the currently calm labor situation there is a headwind for platinum futures and PPLT. [Platinum ETFs Play Catch Up]

Interestingly, PPLT has not suffered outflows on par with gold ETFs such as GLD. Since the start of the fourth quarter, GLD has bled $1.2 billion while PPLT has, perhaps mysteriously, seen modest inflows.