Platinum On The Rise: Why It’s a Good Sign for the Economy (PPLT, PTM)
Platinum has many more industrial uses than gold and, according to MarketWatch’s Myra Saefong, its move above the price of gold in the last week is seen as evidence of greater economic confidence and perhaps an end to the fed’s bond buying program.
When the gold platinum ratio is low it points to weaker economic conditions and weakness worldwide. Platinum reacts to improving economic conditions and this recent move is coming as good news for those weary of five years of monetary and economic problems worldwide.
Tim Murray of precious metals marketing at Johnson Mathey said in a recent article that gold and platinum are both precious metals and will run together, but platinum responds more to news from the industrial and auto side.
Platinum is particularly sensitive to supply issues since it is 30 times more rare than gold and cannot be recycled as easily. So the fact that Anglo American Platinum Limited (OTC:AGPPY), the world’s largest producer of platinum, said it would close operations at two mines, could be adding to the run in price.
But the current rush to the silvery metal is seen as adding growth to portfolios rather than the wealth preservation of gold.
Saefong said, if you’re looking for savings, gold is your play, but platinum is the play for short term gains.
Related: ETFS Physical Platinum Shares (NYSEArca:PPLT), UBS E-TRACS Long Platinum TR ETN (NYSEArca:PTM)