Platinum exchange traded funds have rallied over the past year, with the white metal hovering near its highest level in six years. Investors continue to pile in.
Over the past three months, the Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT) has increased 43.1%% and the GraniteShares Platinum Trust (PLTM) has added 44.5%.
Money managers have started pouring into platinum partly because the hard asset is seen as a good store of value in face of potentially rising inflation pressures, the Wall Street Journal reports.
After the run in gold prices last year, some have turned to platinum as a cheaper alternative. Comex gold futures were hovering around $1,818.9 per ounce on Friday, while the platinum spot price was at $1,251.5 per ounce.
“It’s a well-kicked dog that’s getting up,” R. Michael Jones, chief executive of Platinum Group Metals Ltd., told the WSJ.
Platinum initially gained momentum on the improving industrial consumption of the precious metal, notably in automobile catalytic converters that limit harmful greenhouse gases from exhaust fumes. The metal is now riding the broader market rally as investors chase after rising markets on expectations of higher returns.
The broad market rally has been fueled by the low interest rate environment, copious liquidity, and fiscal stimulus.
Among speculative investors, bullish positions in platinum futures now outnumber bearish positions by the biggest margin since last February, according to Commodity Futures Trading Commission data. ETFs backed by platinum held 3.9 million troy ounces of the metal as of the end of January, compared to 3.4 million a year earlier, according to the World Platinum Investment Council.
“We have seen investors who have owned gold for years recently moving into platinum for the first time,” Trevor Raymond, research director at the group, told the WSJ.
For more information on the metals market, visit our precious metals category.