In a year in which gold notched its best annual showing since 2010 and palladium soared, platinum and the Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT) went largely overlooked.
PPLT seeks to reflect the performance of the price of physical platinum, less the expenses of the Trust’s operations and is designed for investors who want a cost-effective and convenient way to invest in platinum with minimal credit risk.
PPLT still finished 2019 with a gain of nearly 21% and there is evidence to suggest some professional investors are betting on more upside for platinum in the new year.
“Long-only exchange-traded funds focused on the precious metal used to curb emissions from diesel cars attracted $850 million this year through Monday, the biggest annual inflow. Hedge funds and other large speculators boosted their bullish bets on platinum to the highest in more than three years,” reports Bloomberg.
Puissant Platinum
Platinum is primarily used in catalytic converters in diesel-powered automobiles, but environmental concerns previously tamped down demand for the precious metal. As such, the price of platinum has fallen over the years amid weaker demand and excess supply, whereas gold and silver have found safe-haven support on an increasingly dovish Federal Reserve monetary policy outlook and palladium benefited from cars that run on gasoline.
On the demand side, platinum will continue to enjoy robust industrial demand. Additionally, platinum jewelry is starting to enjoy a jump in demand as well, especially among the Millennial generation—younger generations in traditional gold-centric economies like India saw 2017 platinum jewelry sales jump 25%, according to Platinum Guild International.
“Platinum, which is also used in jewelry, has traded at a premium to gold until 2014. As prices of precious metals fell across the board, the growing popularity of gasoline-fueled vehicles as a result of the scandal pushed prices of palladium above platinum by 2017. Platinum is now starting to catch up to its peers, with prices climbing 8.6% in December,” reports Bloomberg.
Investors added $102.22 million to PPLT in 2019.
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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.