Why The Platinum ETF is Surging

Fresh U.S. sanctions against Russia are having a positive impact in at least one part of the financial markets. Platinum prices are rising because Russia is the second-largest producer of the metal behind South Africa.

The ETFS Physical Platinum Shares (NYSEArca: PPLT), the largest exchange traded fund listed in the U.S. backed by physical holdings of platinum, is up 3.2% over the past week and 6% over the past month, moves that account for significant chunks of PPLT’s 6.9% year-to-date gain.

Although platinum is not as heavily traded as gold or silver, it is the third-most traded precious metal in the world and it is more scarce than its more popular rivals. Industry observers also believe that platinum companies have overextended operations during the commodities boom in prior years and have suffered from an oversupplied market as a result.

“Platinum posted its best weekly advance since January, climbing for six-straight days as the U.S. imposed further sanctions on the world’s second-biggest producer,” reports Eddie Van Der Walt for Bloomberg.

The latest U.S. economic sanctions against Russia are playing a part in the recent platinum surge.