I’ve made this trade a few times now over the past couple years.
The premise is simple – which is always the hallmark of a solid trade. I buy the ETFS Physical Platinum ETF (NYSEARCA:PPLT) whenever the spot price of platinum falls significantly below the spot price of gold.
Platinum is rarer than gold and typically sells for 10-15% more – so it’s a matter of waiting for platinum to resume its normal relationship with gold.
The last time I made this trade was in 2011, and I scalped about 11% over four months.
I then bought PPLT again in April of 2012 – when I wrote:
“I put in a lowball bid at $150 on the ETFS Physical Platinum Shares Fund (NYSEARCA:PPLT).
“I anticipate that I will get filled sometime in the next week or so.
“And I anticipate I’ll make another 10% or more in the next few months at the very least as the situation reverts to the mean.”
I then wrote to you again in early December of 2012, telling you there was still time to get in on this trade:
“Buy platinum (I prefer the ETFS Platinum ETF (NYSEARCA:PPLT) and hold it until the trend reverses back to normal.”
Well, now platinum is back on top.
I plan on selling PPLT if it stays on top for more than one trading week.
That means that if it’s still more expensive than gold by this time next week, I’ll pull the trigger and sell.
And I hope you were able to make this trade alongside me. I rarely make trades like this one, but it’s one of the exceptions to the rule.
And if you missed out, don’t fret. Other opportunities will come along – and I’ll keep you alerted.
Kevin McElroy is a top rated commodity researcher and analyst specialist at Wyatt Investment Research, with a targeted focus on short and long term investment opportunities. He has worked in the investment publishing field for over three years alongside some of the world’s leading commodity traders and analysts. He takes the complex futures and options trading strategies from the floors of the Nymex and the CBOT, uniquely combines them with economic trends and positions his recommendations in a way that any investor, from a straight long-term buy and hold investor to a sophisticated day trader can easily understand, implement, and profit.
Kevin constantly finds unique ways to profit from the “real stuff” like oil, gold, iron, corn – the energy, money, goods and food that the world constantly needs more of. Kevin is the daily editor to Resource Prospector and a contributor to Energy World Profits and Global Commodity .