Platinum

benjamen

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Wow, platinum is below $1,400 in spot price! :flail:

It is also over $160 below gold; is anyone else thinking of loading up?
 

bushi

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...I was recently considering it, it is quite strange - and if China/India gets up with the cars (=> catalytic converters) sales, it might be a very good shot.
 

h4rdware

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It might take a while to catch up but the physics suggest its a pretty good bet. I'd buy deeply into any physical PM which seems to be lagging.

One of the reasons I'm interested in the white metals is their strange physical properties. I think of them as scientific/technological discoveries waiting to be made. And as they are (and some have been made already) their use value just keeps increasing - while their availability remains pretty rigid.

Until scientific discovery has been 'exhausted' - if that can ever happen - any limited elemental resource can only yield benefit in the future. Physical mining capability is unlikely to outpace our ability to find ways to use the stuff - at least until we manage to get off the planet (if that ever happens too!) - simply because mining has a nearly flat yield, while thinking results in exponential yield.

For the moment gold/silver look better but some day that will change and it will be good to have some of the other stuff sitting there when it does.

Also remember that the 'recognizability' of gold isn't always a good thing. There are times in history where it was impossible to move the stuff. Clever, desperate people learned to fashion household objects out of platinum and moved it across borders with relative ease when things got rough. Ideal physical properties aren't limited to gold - the ideal properties depend on the scenario. I'm not being negative gold (that would be nuts) so much as pointing out some benefits of diversity.


I haven't posted for a while 'cos I've been busy with family stuff. But I'm still reading PMBug when I get the op.
 

DoChenRollingBearing

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MONEX of California called me to tell me that they have Platinum Eagles in stock. They wanted something like $1545 or so per oz. Which is about right, Pt is NOT as liquid as gold, hence wider spreads.

MONEX minimum purchase is 10 oz of Pt.

Good thread benjamen!
 

benjamen

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MONEX of California called me to tell me that they have Platinum Eagles in stock. They wanted something like $1545 or so per oz. Which is about right, Pt is NOT as liquid as gold, hence wider spreads.

MONEX minimum purchase is 10 oz of Pt.

Good thread benjamen!

I have found the Canadian 1 ounce Platinum Maple Leaf usually runs much lower than the 1 ounce Platinum Eagles. I am not sure why, but for the money I have been going with the Maple Leafs.
:shrug:

Also, I have zero trouble selling Platinum to the LCS for spot or better.
 

Bonzo

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I usually buy Credit Suisse Pt 1oz bars. Got a promo in the mail yesterday from Monex pumping Pd as going to outperform all other PMs. And just noticed as all PMs are soaring today Rh took a $-50 hit to $1225. Don't quite understand that move. Kitco still has the bars listed at $1500 though.
 

benjamen

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Platinum production is falling, while demand increases:
http://www.kitco.com/reports/kitcoNewsMarketNuggets20120625.html

"Platinum prices appear to have dropped below the marginal costs of production in South Africa, which is likely to lead to mine closures, says Commerzbank. Anglo Platinum, the world’s largest platinum producer accounting for 40% of worldwide platinum mine production, envisages operating costs this fiscal year of 14,000-14,500 South African rand per ounce platinum-equivalent. “Currently, however, the price of platinum is riding at almost exactly ZAR 12,000, and it is to be feared that the operating costs will increase even further on the back of the production outages,” Commerzbank says."

'The most recent Swiss trade statistics bode well for demand for platinum group metals, says Commerzbank. The data show that platinum and palladium exports from Switzerland, which traditionally serves as a trading hub, climbed to 5.3 and 6.8 metric tons respectively. “We are confident that the purchases by European auto manufacturers are attributable to the currently attractive prices and to fears of a tightening of supply,” Commerzbank says. “The supply problems experienced by South Africa, which accounts for 75% of global platinum mining production, are already indicated by Swiss imports from the country, which have plummeted to their lowest level since March 2010.”'
 

Penn

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I own some. I doubt I will buy more tho. It is less liquid. Tho better then paper... and I wont touch palladiun.
 

benjamen

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Bearish article on Platinum:
http://www.24hgold.com/english/news...20&redirect=false&contributor=The+Gold+Report

"There's also been a massive buildup of short positions in the NYMEX platinum futures and options market since March. They're at record levels. Gross short positions are approaching 900,000 oz (900 Koz)."

"The investment picture has been building on the negative view of fabrication demand: slower growth in jewelry demand in China and weakness in the European economy that has been weighing on the auto market."

"In 2011, its C1 PGM cash cost was about $994.90/oz. It was the second highest cost mine. It improved its cash costs over the past few years, but the deteriorating operating conditions in South Africa in recent months likely weighed very heavily on the mine's operating performance."

:popcorn:
 

benjamen

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I think this investment might be a great long term deal for the Chinease:
http://www.atimes.com/atimes/China_Business/NF29Cb02.html

This article really does hit all the current points related to platinum:
1) increased number of uses being discovered
2) price is temporarily knocked down by Europe's woes since they are the number one user of the metal
3) 80% of the world's production comes out of South Africa
4) South African mining sector is having real problems with the unions and strikes
 

benjamen

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Now this you don't see everyday:
Three people have died in a violent invasion of a South African mine operated by Australian-listed Aquarius Platinum.

A group of about 200 people, some of whom were armed and threw petrol bombs, stormed the Kroondal platinum mine site yesterday afternoon, Aquarius said.

The group are believed to be former employees of a mine contractor who were dismissed after taking illegal strike action in June.

"It is confirmed that three people have died and at least 20 others were injured in this incident," Aquarius said in a statement issued today.
...
http://www.smh.com.au/business/deadly-invasion-at-aquarius-platinum-mine-20120802-23gp0.html

How is platinum under $1,400?!
 
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benjamen

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Another article calling for platinum as a great buy:
http://pricedingold.com/2012/08/05/market-update-3-aug-2012-new-low-for-platinum/

"The "other white metal" is now 13.23% cheaper than gold at 27 grams per ounce. I continue to expect that platinum will eventually trade for more than gold, as it has for most of it's history, but fears of recession in the US and Europe, along with slowing growth in China, appear to be pushing industrial metals like silver, copper and platinum lower in the short term. I see this as a buying opportunity."

:cheers:
 

superhero

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Why is the premium on platinum so high? I can buy gold for $35 over premium, but the lowest premium on 1 ozt of platinum is $55. Doesn't seem right.
 

benjamen

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http://www.321gold.com/editorials/moriarty/moriarty081312.html

"Rhodium still has value and while it may not hit $10,000 any time soon it’s been higher than it is today for 99% of the last 8 years. It’s a pretty sure bet at these prices. It’s down some 89% from it’s record high in 2008."

"Only three times in the last 25 years has platinum sold at a discount to gold. The spread may well widen but I’m not the only investor looking at numbers and the platinum gold spread is a pretty sure bet. History doesn’t repeat but it does rhyme."

Why is the premium on platinum so high? I can buy gold for $35 over premium, but the lowest premium on 1 ozt of platinum is $55. Doesn't seem right.

Physcial platinum is very rare. Just because paper platinum is so low, it doesn't make getting your hands on the real thing easy.
 

superhero

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Platinum up $36 today.

<-- here's one person who is kicking himself for not buying at $1390 because he thought premiums were too high.
 

benjamen

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Platinum up $36 today.

<-- here's one person who is kicking himself for not buying at $1390 because he thought premiums were too high.

I hear you on that one. I was planning on buying some this weekend. Lets hope for a Friday drop!
 

ancona

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You know, I would purely love to have twenty or thirty platinum bars, but I can't get past the price. I still feel that when the balloon goes up, silver will have five or six times the delta that gold and platinum will have.
 

benjamen

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You know, I would purely love to have twenty or thirty platinum bars, but I can't get past the price. I still feel that when the balloon goes up, silver will have five or six times the delta that gold and platinum will have.

While you may be correct, I like to diversify. My silver already takes up a much larger than wanted percentage of my holdings. Essentially, if you could not choose silver, which metal would you choose right now?
 

ancona

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Gold or platimun of course. However, the fact that your silver "takes up too much space" should be a wonderful problem to have. In fact, I wish I had that problem. ; - )
 

benjamen

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Gold or platimun of course. However, the fact that your silver "takes up too much space" should be a wonderful problem to have. In fact, I wish I had that problem. ; - )

Storage issues with silver is simply a function of buying metals over a long period of time.
Just think, for illustration, if you had forced yourself to have the discipline to buy 2 tubes of ASEs every month for the past 10 years. You would have almost 5,000 ounces! Now, imagine trying to store that much silver in a small apartment!
I prefer to buy stuff I can fit into safety deposit boxes and store the truely valuable metals, brass and lead, at home.
:wave:
 

superhero

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Yup, read similar article on CNN. 10+ dead over the weekend, another 30 dead yesterday.

Pt/Au ratio was .86 on Monday. Now back to 0.91.
 

superhero

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You know, I would purely love to have twenty or thirty platinum bars, but I can't get past the price. I still feel that when the balloon goes up, silver will have five or six times the delta that gold and platinum will have.

Hindsight is 20/20. Would rather have bought 2 platinum bars with their $55 premiums instead of 2 gold bars with their $15 premiums. Platinum has gone up $70 while gold has gone up $15 during the same period.
 

DoChenRollingBearing

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Re PMs, Pt is my second largest ($ value) holding... Just in case we have a great economy going forward (not my guess..).
 

bushi

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You know, I would purely love to have twenty or thirty platinum bars, but I can't get past the price. I still feel that when the balloon goes up, silver will have five or six times the delta that gold and platinum will have.

yeah I agree, it seems there's a strong case to be made here, from the market point of view. But it all depends so much on the political decisions, that I would still not bet my farm on one single metal, I'd rather diversify.
 

Jetstream

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The problem in Canada is that you have to pay tax on Platinum and Palladium but not gold/silver. That's an extra 5% tacked on right away.
 

benjamen

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Long, but good article:
http://www.hardassetsinvestor.com/i...higher-prices.html?showall=&fullart=1&start=4

Summary:
When 80% of the worlds supply of platinum comes from South Africa and they are not expecting to solve this labor dispute any time soon, we may approach platinum's 2008 high prices.

Towards the end of the article they discuss gold ETFs. Intestesting idea that money that used to invest in gold mining companies now partially flows into ETFs and that may be the reason gold mining companies are now priced lower than they used to be.
 

ancona

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Benjamen,
When SA nationalizes the PM mines, they will ultimately end up just like the oil extraction currently being done by the Venezuelan government. The industry will collapse in upon itself after all of the cronies peel off their piece. In Venezuela, Chavez has deferred maintenance and virtually stopped exploration for new oil so that he can continue buying votes from the poor. There has been a monumental brain drain as well as a shitload of cash moved out and away from Venezuela.

The same exact thing is what I forecast for SA. When the government expropriates the mines, all other industry will leave, since they would theoretically be next. Just as Robert Mugabe destroyed his country through expropriation, so will SA.
 

ancona

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The strike is over and miners have been given a substantial raise, agreeing to end the walkout.
 

benjamen

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Platinum down $20+ today. Any reason for this?

http://www.platinum.matthey.com/pgm...letins/8th-october-2012-to-12th-october-2012/

"The supply situation in South Africa remained tense as striking workers at Anglo American Platinum briefly blocked a shaft following the company’s decision to sack 12,000 workers at the strike-hit Rustenburg operations at the end of last week. Junior platinum miner Atlatsa Resources also fired over 2,000 striking workers at its Bokoni platinum mine following an illegal strike. Uncertainty over supplies and global growth was reflected in the choppy trading of platinum around the $1,700 level."

Also, we just watched a large run up in price in platinum. A small pull back is to be expected.
 
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