According to Smart Money platinum doesn’t get a lot of respect as a precious metal. Indeed, gold does seem to grab all of the lime light. Platinum’s $251 billion market is tiny compared to gold’s huge $1.9 trillion market. However, unlike gold platinum is an industrial metal and is a major component of catalytic converters, and is popular in jewelry. Platinum is also rarer than gold and more often than not trades at a higher spot price than gold. The supply is low and the industrial demand for platinum is high means we can expect a significant price boost in 2013.
Not only is the supply of platinum low, but South Africa which is the largest supplier of the metal is often plagued with strikes and labor unrest problems. This is a problem for industry and mining share owners, but serves to keep the spot price of platinum high. This means the best way to invest in the metal is to buy physical platinum bars or platinum bullion coins from Monex, the leading name in the business.
Reuters believes the current low platinum price offers an excellent investment opportunity. Not only does platinum add investment diversity but it is also a smart investment strategy. Much of platinum’s industrial use comes from the automotive industry, and car sales remain strong in emerging markets like China and India. Jewelry sales have also been on the rise and are likely to continue. Platinum is currently underperforming; however the conditions are right for a spike in its spot price. Prudent investors will buy now before the price soars upward.
According to an article titled Why Platinum Could Outperform Gold and Silver, we could see gut wrenching inflation soon as central banks keep priming the world economy with worthless printed money to stimulate the economy. The article also states that, reduced platinum supply from volatile South Africa along with increased demand from emerging economies could spur the platinum spot price to out-pace gold by a large margin. In other words, 2013 is shaping up to be a good year to buy physical platinum bullion.
Consider that General Motors now sells more cars in China than in the United States is a telling sign for platinum. More of the metal will be needed for catalytic converters as car sales continue to increase. Yet, the supply remains low and disrupted. Platinum is currently 20 percent below its pre-credit crisis highs, while gold is 80 percent over. This extreme deviation cannot be maintained, because by historical standards gold typically trails platinum in price.
Conditions are ripe for a platinum correction and it will likely occur soon. Since platinum is a speculative investment buying at its current bargain price just makes sense. Central banks continue to pump alarming amounts of fiat cash into the world economy. This will increase inflation meaning gold, silver, and platinum will all rise. Considering platinum’s robust industrial demand and trouble plagued supply line seems to indicate platinum will soon right the ship and again beat gold. Buying tangible platinum now from a reliable dealer like monex.com, and their 40 years of industry experience, is paramount if speculative profits interest you.