RSSPlatinum ETFs: The New Gold?
By Tom Lydon | January 28, 2010 | 10:53 AM | 0 Comments
Gold is so 2009. While prices for the yellow metal have stabilized, in swoops platinum to hog the spotlight. Why is everyone so hot on platinum right now?
- A New ETF. ETFS Physical Platinum Shares (NYSEArca: PPLT) is the first physically-backed platinum focused ETF to trade in the United States. According to its creators, PPLT will start out with $500 million or roughly 329,000 ounces at current prices – a significant figure considering that the commodity’s surplus for 2009 was only about 100,000 ounces. [Can these ETFs outdo gold in 2010?] ETF Securities‘ platinum and palladium ETFs had a resoundingly successful first week, hitting $350 million in assets. The funds also saw trading volume upward of 300,000 shares for palladium and 450,000 for platinum.
- Jewelry. Even when the West began thinking twice about buying any jewelry in the face of the economic crisis, China stepped in to buy large amounts at the lower prices. Much of the demand for platinum comes from the jewelry market, where fashion trends and economic factors have increased interest in the metal.
- Increased Production. Analysts expect both platinum and palladium to have a stellar year in 2010 because of the increase in industrial production.
- Cars, Cars, Cars. China’s fast growth has put this country in the lead as far as the auto industry goes. Car sales in China shot up by nearly 53% to 10.3 million in 2009, while total auto sales – including heavy commercial vehicles – rose 46.2% to 13.8 million units. Experts still expect the sector to post a solid year-on-year gain of 10%–15% this year.
- And More Cars. It’s predicted that Brazil, Russia, India and China (BRIC) will account for 30% of the world’s auto sales in 2014, reports the Economic Times. European auto registrations are up, rising 16% in December compared with the same month a year earlier, according to the European Automobile Manufacturer’s Association. GM is anticipating that it will need a new plant in China as sales rise there. China is the world’s largest auto market – sales of GM cars in China last year shot up 66.9% from 2008, says Reuters.
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