Hi everyone,
Just to share some thoughts.
The World Platinum Investment Council has reduced its surplus supply forecast by close to 50% for 2019 due to investment demand. Bear in mind that it is still in surplus, so I don't imagine that the bottom is in yet.
Platinum outperforms gold in good times and bad. Since 2003 Platinum significantly out-performed gold (smaller market than gold) but was more heavily impacted by forecast reductions in industrial demand. So I think looking forward it would be safe to say that Platinum is primarily driven by industrial demand while gold is primarily investment driven. So platinum reached its ATH (higher than gold ATH) in 2008 vs gold in 2011. It has out-performed gold on the downside too.
I am starting to be quite interested in Platinum, however, think that there is lower to go because:
- Industrial demand hasn't picked up (but seems to actually be dropping),
- US PMI is way down,
- global economic outlook has been reduced by the IMF (outlooks are generally gloomy - we have seen how Platinum reacts in a recession. If 2020 is a recession like a lot of people are pointing to, it would be very difficult to be bullish on Platinum),
- Global outlook for motor vehicle sales is down - Platinum is commonly used as a catalytic converter of pollutants in car exhausts.
- It hasn't yet met made a 1:1 extension of wave (A) or normal extension of wave C down (I think wave C is about 75% complete with a possible dip to sub-$500),
- Any break below $760 territory would point to further correction of Platinum,
- Supply is likely to be increased if the price picks up either by processing mining stockpiles, expansion of operations, or by increasing recycling as the prices pick up (presently recycling is down - likely waiting for higher prices),
- Given recent US politicians' seemingly anti-environmental stance - the requirement for Catalytic converters could foreseeably be repealed by imperial decree (like the need of coal mines not to dump tailings into waterways) - this could cause a significant reduction in demand for Rhodium, Platinum, and Palladium. This said, presently 90% of cars produced globally have a catalytic converter fitted and the rest of the world would be expected to retain or strengthen limits on exhaust emissions so it would erode export demand for US vehicles,
- There is far more interest in electrical, or alternative fuel vehicles which points to long-term pressure on automotive industrial demand.
So is it all doom and gloom? An important sign to watch for is for any progress in research on Platinum as a catalyst for the refining and conversion of exhaust of gasoline / petrol.
Also, if gold continues its bullish sentiment, this will likely cause upward momentum on Platinum from first investors, and later, from industrial sources (that have to buy).
So is there and easy way to buy physical Platinum or is an ETF easier? I would buy physical platinum via bullionstar.com (I am not an affiliate) in Singapore rather than an ETF. The premiums and spreads can be quite low: its Bullion Savings Program Platinum offering (today) presently 3.64% over spot price and 3.51% over buy-back price and vault storage fees are low and the physical metal can be withdrawn or just purchased in their shop.
My concern with ETFs (the way most people invest in metals) is that ETFs sell far more "shares" in physical metal than they hold and if the price spikes significantly they will likely be closed and neither be able to pay you back or to send you physical metal. When the price spikes it is very difficult to actually get your hands on the physical metal.
Long story short, I will likely be a buyer around $550 and below.
Thanks for viewing
Just to share some thoughts.
The World Platinum Investment Council has reduced its surplus supply forecast by close to 50% for 2019 due to investment demand. Bear in mind that it is still in surplus, so I don't imagine that the bottom is in yet.
Platinum outperforms gold in good times and bad. Since 2003 Platinum significantly out-performed gold (smaller market than gold) but was more heavily impacted by forecast reductions in industrial demand. So I think looking forward it would be safe to say that Platinum is primarily driven by industrial demand while gold is primarily investment driven. So platinum reached its ATH (higher than gold ATH) in 2008 vs gold in 2011. It has out-performed gold on the downside too.
I am starting to be quite interested in Platinum, however, think that there is lower to go because:
- Industrial demand hasn't picked up (but seems to actually be dropping),
- US PMI is way down,
- global economic outlook has been reduced by the IMF (outlooks are generally gloomy - we have seen how Platinum reacts in a recession. If 2020 is a recession like a lot of people are pointing to, it would be very difficult to be bullish on Platinum),
- Global outlook for motor vehicle sales is down - Platinum is commonly used as a catalytic converter of pollutants in car exhausts.
- It hasn't yet met made a 1:1 extension of wave (A) or normal extension of wave C down (I think wave C is about 75% complete with a possible dip to sub-$500),
- Any break below $760 territory would point to further correction of Platinum,
- Supply is likely to be increased if the price picks up either by processing mining stockpiles, expansion of operations, or by increasing recycling as the prices pick up (presently recycling is down - likely waiting for higher prices),
- Given recent US politicians' seemingly anti-environmental stance - the requirement for Catalytic converters could foreseeably be repealed by imperial decree (like the need of coal mines not to dump tailings into waterways) - this could cause a significant reduction in demand for Rhodium, Platinum, and Palladium. This said, presently 90% of cars produced globally have a catalytic converter fitted and the rest of the world would be expected to retain or strengthen limits on exhaust emissions so it would erode export demand for US vehicles,
- There is far more interest in electrical, or alternative fuel vehicles which points to long-term pressure on automotive industrial demand.
So is it all doom and gloom? An important sign to watch for is for any progress in research on Platinum as a catalyst for the refining and conversion of exhaust of gasoline / petrol.
Also, if gold continues its bullish sentiment, this will likely cause upward momentum on Platinum from first investors, and later, from industrial sources (that have to buy).
So is there and easy way to buy physical Platinum or is an ETF easier? I would buy physical platinum via bullionstar.com (I am not an affiliate) in Singapore rather than an ETF. The premiums and spreads can be quite low: its Bullion Savings Program Platinum offering (today) presently 3.64% over spot price and 3.51% over buy-back price and vault storage fees are low and the physical metal can be withdrawn or just purchased in their shop.
My concern with ETFs (the way most people invest in metals) is that ETFs sell far more "shares" in physical metal than they hold and if the price spikes significantly they will likely be closed and neither be able to pay you back or to send you physical metal. When the price spikes it is very difficult to actually get your hands on the physical metal.
Long story short, I will likely be a buyer around $550 and below.
Thanks for viewing