Platinum

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CaptainOverkill
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Platinum

Can't believe no one has yet made a topic on this.

So, what do people think of this one as opposed to silver and gold? I believe last year at one point it was almost $400 over gold, and now it's sort of floated around $1750-$1850 for almost a year. It sure seems to be vulnerable to wild price swings in a way gold and silver are not - I've seen days where gold is down $2.00 and silver down $.25 with platinum down $20-$30. I have a single one ounce platinum coin but I'm not too sure whether I should be investing in more or not given the price volatility and how prices seem to be "stuck" in the aforementioned price range.

Edited by admin on 11/08/2014 - 06:11
WmMck
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Swing Trade with Silver

When the Pt to Ag ratio goes down (like in late April) trade Ag for Pt.  When it reverses enough to get extra (~20%) Ag ounces trade back.  Of course the same can be done with Au or Pd.  Sort of like Forex trading with only 4 pairs and no fiat.

markjohns
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Belief Platinum is changing

Most of my research shows most PM investors treat platinum as mostly an industrial play. So when major shocks occur investors flee platinum and run to gold.

Now I think there has been two important developments that give support to platinum. The first is in jewelry. Platinum is becoming more popular as a jewelry choice. The second is in medical treatment. Platinum is the basis for at least one chemotherapy drug.

A balanced mix is probably everyone's best bet. Silver for trade and commerce. Gold for wealth protection. Platinum to capture an industrial recovery.

Captain Silver
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Low liquidity

Platinum is a very small market, few players.  Industrial demand is substantial part of market, but is not large.  Jewelry demand is growing as stated before.  I believe you can play the same industrial recovery bet with silver in a more liquid market.  Nothing inherently wrong with platinum as a commodity but it will not be recognized as money like silver/gold if the SHTF.

I've just never seen the value of entering the market over silver/gold, although there have been times as stated in the previous post when price ratios and phys premiums were favorable.  To play that game would require timing in a slow market, tough to do.

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Nick Elway
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Platinum back above gold

When the platinum/gold ratio got to 1:1  I purchased some 1/2 ounce platinum eagles at apmex.  The premium is too high, and the online selection is quite limited (I can't afford tulving) 

I believe it is impossible to counterfeit (more dense than gold and tungsten).  I used platinum in a laboratory ...what a metal!

Perhaps it has less confiscation risk than gold?

If FOFOA is right, it won't keep up with gold, we'll see..

http://www.kitco.com/charts/liveplatinum.html

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CaptainOverkill
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Gold vs. platinum

Nick,

First, if I were you, I would look at Provident Metals or other places if you want to buy Platinum Eagles. The premiums charged by APMEX are extremely high - they are the highest of the "reputable" bullion dealers in my opinion. You can also get the 2011 proof platinum eagle at the US Mint's website, but they charge a hefty premium.

The thing about platinum right now is that it is not being treated as "money" like gold and silver are. It's being treated like an industrial metal, and thus is vulnerable to things like stock market crashes and major problems in the auto industry (platinum prices went way down during the Japan earthquake and nuclear panic if you recall). FOFOA basically thinks "gold is money and nothing else." I think instead of just gold, we are likely to see a basket of commodities used as money during the interregnum period where the big currencies are collapsing but no credible challenger has emerged as a new reserve currency. Among these commodities, I expect to find platinum and oil in addition to gold and silver. FOFOA is a deep and serious thinker, but I believe he is too monofocused on gold and too dismissive of other potential "hard currencies."

It's also worth noting that there's some chance you could see South Africa nationalize their platinum mines, Zimbabwe style. If that happens, watch for platinum to go to the moon as the main source of it is cut off.

CaptainOverkill
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Just want to add, now that

Just want to add, now that the lastest -400 day is over, that I'm hoping it's significant we had a day where gold, silver and platinum all went up together while palladium sunk along with virtually everything else today. Perhaps we're starting to see flight to safety move into platinum at last alongside the other two? It would be a nice surprise.

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Out of Au and AG and in to PPLT

Yeah, it would be nice to think that platinum is catching a bid for store of value/money purposes. I closed out $500,000 in CEF over the last two weeks and it's all in PPLT at 1:1.  I'm sure that I'll make a 20% profit as the ratio rights itself and hopefully lots more if the metals both move up to reach that ratio.

I've done this once before with amazing results, though it wasn't then a really quick trade (waiting to get the ration back to "normal.") I have no idea if or how long it will take this time to get back to 1:.80

Ogun de dun

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CaptainOverkill
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Animal Sacrifice, 1 : 0.80

Animal Sacrifice,

1 : 0.80 will probably take about as long as it takes for the CME to hike margins five times in a row. ;-)

I see we had another gold/silver/platinum up day with everything else (Palladium included) down. Seems like a good sign for platinum.

Animal Sacrifice
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1:.80

I think don't think that it necesarily will take 5 Au margin hikes to get the ratio back to normal. I expect platinum to rise & Au to correct.

As for palladium, I'll sell SOMETHING & be a buyer if it falls to ~ $650. In 1996 I bought 100 Isle of Mann 1 ozt palladium coins took a bunch of them to México City and had several pieces of palladium+gold men's jewelry made for myself. Got home & threw about 75 of the coins in a box & forgot about them until 2001/2002 sometime; palladium had risen to about $1100 so took them to the store I bought them from years ago & hit a jackpot.

I'm not aware of any palladium / platinum ratio to give guidance, but then the world is made of what I am unaware of. Over the years, though, I've often seen the two metals make big swings in opposite or the same directions

May all our trades be very green!

Ogún fun o mi opolopo owo

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Animal Sacrifice
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The last three parities

You know as well as I do that charts lie and analysts prevariate but while I found lots of gold/platinum ratio articles and charts this was the one that I liked best specifically because it doesn't paint a 50 year return to a normal ratio (and for me "normal" isn't 1:.50 or so before the first part of this depression but the 1:.80 that mostly followed it. I'm selling at 1:.80 unless things change. 

You might like to look at the chart; the last three times the two metals reached parity, it didn't stay there for long.

Platinum is also much more vulnerable to geopolitical risks: S. Africa, Russia. And a strike could drive the price up PDQ.

HGH IMO YMMV

Ogun fun me opolopo owo,

Here's the chart:  http://stockblock.info/2011/08/platinum-gold-ratio.html

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CaptainOverkill
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Thanks for linking the chart.

Thanks for linking the chart. Seems like the ratio hits 1 : 1 in times of economic volatility/dislocation - no surprise to me.

As for geopolitical risks, I agree. Right now far fewer people have much of a clue about platinum - information about it is much harder to come across than gold, and most of the big gold blogs rarely (if ever) bother to discuss it. Once people start to realize just how rare platinum is, and how at-risk the supply of it is right now, the price is likely to start climbing rapidly. Given how South Africa has been making noises about following Zimbabwe's example, I think it's only a matter of time before the supply becomes severely constrained.

Animal Sacrifice
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Which is the better investment right now?

Obviously I think platinum is. Obviously I could be wrong. One thing that influences perception is culture though. In the USA platinum is more used for jewelry than it is here. Here we have a much heavier history of use of palladium as jewelry than we do platinum (it MAY be because of the lower price but frankly palladium jewelry LOOKS better than platinum jewelry to me.) So who knows?

I've placed my due diligence bet and will live with the outcome without rancor or chest thumping.

Ogun fun mi opolopo owo

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CaptainOverkill
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I pretty much agree with you

I pretty much agree with you that the big money, going forward, is going to be in platinum (and I think it's also going to be in gold as well). I don't know enough about Palladium to really make comments on how it might do in the future. I know it's used for a lot of the same things platinum is and is less rare, but the price of palladium's staying down while platinum's price keeps rises next to gold and silver. My inclination is that it's not going to do as well as the other three because not enough people "know" about it as opposed to the other metals and therefore won't benefit from "flight to safety" money.

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For the platinum lover

Great article for the platinum lover:

http://newsguide.us/technology/industrial/global-heavy-duty-diesel-hdd-catalysts-market-to-reach-26-billion.html

$2.6 bullion in a $13 billion sector is a nice injection.  If bullion supplies are tight now, just wait.

Any thoughts?

JM

Animal Sacrifice
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@WmMck @Johnny N

WmMck what does the Pt : Ag ratio feel like? I have a very good feel for the Pt : Au ratio but never played /w the Pt : Ag ratio.

Johnny N Thanks for the link. I spend very little time each month on TF's site & 90% of that is using my móvil. I'll read the article once I get on a real computer.

I'm not really paying any attention to the PM markets since my switch out of Au & Ag into Pt is a fairly long term set & forget investment. I check the ratio maybe once/week. My exposure to Au & Ag is only through GDX, GDXJ, SLV, & EXK.

Ogún fun o mi opolopo owo

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Animal Sacrifice
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Interesting Article + Pt : Ag ratio

Thanks for the interesting article. I note that palladium is replacing Pt in regular catalytic converters which can't be a great move for the metal, but since I am just playing the ratio it really doesn't matter to me.

Regarding the Pt : Ag ratio (which started worrying me since I not only sold my PHYS but also my CEF to buy my position in PPLT  and everyone on this site is going gaga over silver) I did some research and found the normal Pt : Ag ratio is 1: 100 which means that this should be a GREAT time to trade in Ag as well as Au for Pt since the Ag ratio is about 1 : 44. So I feel A LOT less worried that I will lose ounces of silver making this trade while I gain ounces of gold. I now expect ultimately to significantly increase my ounces in both metals. I'm giving this a 5 year go.

I've noticed that PPLT may not track Pt as well as it should with some decay (it is supposedly backed fully by the metal) and I guess this is just the added cost of investing in Pt like the higher premiums for actual Pt coins sold by dealers.

Ogún fun o mi opolopo owo

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CaptainOverkill
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I've put up a fairly lengthy

I've put up a fairly lengthy post on my blog about where I think platinum has been and where it is going. Thanks to Jack, Animal Sacrifice, and others who have provided so much information about the metal to me. My writing is nowhere near the caliber of what our esteemed blog host could produce, but I hope some people find it helpful.

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Nice work on the blog

I see trends in South Africa that are a bit foreboding, with the instability in the country and talk about nationalization of gold mines there is an issue pushing the metal upwards besides following gold.  Indian wedding season is seeing more couples purchasing the white metal, and why not with the limited production and availability of platinum.  Seems like a good investment and we do not know how much China is importing but the slowdown in the US will affect demand on it as well as European manufacturing coming out on the low side.

Platinum might be a good bet once the ratio widens a bit more.

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Animal Sacrifice
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Excellent Article

I think you wrote a very high quality blog post on your blog and feel like he first comment in that I am way ahead of the curve on this one. It seems that no one here is Turdsville cares to even hear about it.

Here's another chart for you:

http://stockcharts.com/h-sc/ui?s=$PLAT:$GOLD&p=W&b=5&g=0&id=p81830651728

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terri5125
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something to think about

DO you guys remember the article that came out several months ago that JP Morgan was buying platinum hand over fist- Physical - not paper... can't remember the article but I know I had emailed it to my dad when I saw that write up.

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