Platinum Backed ETF Planned For U.S. Launch

There are plans to launch a platinum ETF in the U.S. backed by the physical metal.

It is expected that the ETF will be run on similar lines to the SPDR Gold Trust and IShares Silver Trust, both highly successful ETFs.

A palladium ETF is also reported as being under consideration.

Both ETFs will give more trading freedom to the average retail investor looking to enter the Platinum Group Metals (PGMs) sector of the precious metals market.

Platinum and palladium have important industrial uses as catalysts, particularly in the hard hit auto manufacturing sector.

The rise in platinum prices from last years low of  $774 an ounce in October to close the week at over $1205 an ounce might be due to auto manufacturers cautiously replenishing run down stocks of the metals aided by a continuing fall off in South African production.

We think it more likely that it is the major players anticipation that the new ETF will mirror the gold and silver trusts effect on the physical market as it builds up its holdings of the metal that has pushed up the price.

The SPDR Gold Trust (GLD) is now the world’s sixth largest holder of gold having edged past Switzerland in recent weeks while the IsShares Silver Trust (SLV) holds 270 million ounces, not far off half the entire average annual silver mined.

Platinum hit a high of $2201 an ounce less than 12 months ago so, on the face of it, there is considerable scope to the upside once the platinum market is open to easy trading.