Platinum Investors Beware!

January 18, 2010 | By | Reply More

Since the launch the week before last, of the new Platinum ETF (PHPT) trading on the NY exchange, the precious metal has seen some very large gains.

This ETF operates along similar lines to the gold (GLD) & silver (SLV) ETFs traded in the US where they hold physical metal in vaults to the approx value of the money invested in each fund.

It should also be noted that a platinum ETF, again holding the physical metal, has been active and available to worldwide investors where it trades in London. Should platinum investors beware that this surge in price is due to the advent of PHPT and is not backed by prospective demand from the auto industry and the jewelry trade?

Whilst we will find any valid excuse to trade any one of the precious metals we are steering well clear of this temptation.

Silver and gold, in that order, seem to us to offer at this time, better value than any of the others in the precious metal category if for no other reason than they are not dependent upon industrial demand and historically are more acceptable as stores of value than platinum.

If high inflation becomes the order of the day within the next 12-18 months and/or the China bubble bursts as some analysts are suggesting then platinum could fall back dramatically to its price zone of earlier in 2009, that is circa $1000 or less, some hit to gamble on!

We repeat platinum buyers beware, if you are already in maybe now is the time to take profits and see how this scenario plays out.

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