Seemingly lost in the fervor surrounding gold ETFs is the fact that platinum equivalents are on torrid paces of their own. While they retreated last Friday, the Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT) and the GraniteShares Platinum Trust (PLTM) are up an average of 9% this month and both are up more than 18% year-to-date.
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.
There’s another catalyst emerging for the aforementioned platinum and it’s one that has boosted gold funds this year: increasing investor demand.
Achieving Platinum Power
“Resurgent investor demand for platinum will drive overall consumption of the metal up 9% this year and lead to a lower surplus, the World Platinum Investment Council (WPIC) said on Friday,” reports Reuters. “The WPIC in its latest quarterly report cut its estimate of oversupply in the roughly 8 million ounces a year platinum market to 345,000 ounces from 375,000 ounces three months ago.”
With respect to the other precious metals, platinum presents a value proposition for seasoned investors and beginning investors looking to shore up their portfolios with commodities.
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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.
“The WPIC is a platinum industry-funded body and uses data from an independent consultancy,” according to Reuters. “Platinum prices plunged from around $1,800 an ounce in 2011 to a low of $751.25 last year as declining demand pushed the market into surplus in 2017 and 2018, according to the WPIC.”
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