Date: 5/22/12
Price: Free
SmallCap Network provides comprehensive research and opinions on AVL, PAL, PLG, PTM, PPLT and PALL.
Platinum Speculators, Traders and Investors Should Profit from Market Inefficiency (PLG, PTM, PAL, AVL, PPLT, PALL)
Pricing Relationshiop between Gold and Platinum is Inefficient, offering Profits
Platinum stocks such as Platinum Group Metals (AMEX: PLG), UBS Long Platinum (NYSE: PTM), North American Palladium Ltd (NYSE: PAL), Avalon Rare Metals (AMEX: AVL), PPLT (NASDAQ: PPLT) and PALL (NASDAQ: PALL)should start to rise do to political unrest, concern about global economic growth and greater demand. Based
on its traditional pricing relationship to gold, platinum is grossly undervalued.
President Robert Mugagbe of Zimbabwe has threatened to appropriate foreign owned platinum and palladium mines in his country. The dictator has a history of seizing property and creating scapegoats to divert the attention away from the way his rule of thugocracy is detroying Zimbabwe. Previously, Mugagbe took farms from white minority owners. This did much to destroy his country's agricultural base. It his worthy of note that other African countries recruited the farmers whose land Mugagebe took due to their expertise and vital contributions to their nation's economic development. In search of another target to blame for his failed rule, Mugagbe is now turning his attention to claiming foreign owned platinum and palladium mines in Zimbabwe.
Platinum and palladium both have significant industrial usages, which should appeal to the small cap investor. Catalytic converters in automobiles are the major market. More and more cars are being produced as India, China and Brazil develop. Other metals do not have this broad usage. The great majority of gold, by comparison, is for investment purposes. For silver, less than half of the production is used commercially.
Platinum does have a pricing pattern with gold, as is also used in jewelry. In 2011, the demand for platinum jewelry has increased by more than 80% in China and by more than 40% in North America. With more turning to precious metalsdue to a loss of confidence in fiat money, platinum will rise in value as a "safe haven asset.' This should appeal to speculators, traders and investors. Platinum is much rarer than gold, as indicted by the price history on the chart below:
Since 2007, platinum has doubled while gold has quadrupled. Historically, platinum sells for about fifty percent more than gold. At present, platinum and gold are both around $1850 an ounce, with Palladium about $750 an ounce. Eventually, this short term pricing inefficiency will be removed as, over the long term, financial markets are efficient. Based on these macro-economic factors and the distortion in the traditional pricing history, platinum and palladium stocks and exchange traded funds should appeal to both small cap investors, traders and speculators.
on its traditional pricing relationship to gold, platinum is grossly undervalued.
President Robert Mugagbe of Zimbabwe has threatened to appropriate foreign owned platinum and palladium mines in his country. The dictator has a history of seizing property and creating scapegoats to divert the attention away from the way his rule of thugocracy is detroying Zimbabwe. Previously, Mugagbe took farms from white minority owners. This did much to destroy his country's agricultural base. It his worthy of note that other African countries recruited the farmers whose land Mugagebe took due to their expertise and vital contributions to their nation's economic development. In search of another target to blame for his failed rule, Mugagbe is now turning his attention to claiming foreign owned platinum and palladium mines in Zimbabwe.
Platinum and palladium both have significant industrial usages, which should appeal to the small cap investor. Catalytic converters in automobiles are the major market. More and more cars are being produced as India, China and Brazil develop. Other metals do not have this broad usage. The great majority of gold, by comparison, is for investment purposes. For silver, less than half of the production is used commercially.
Platinum does have a pricing pattern with gold, as is also used in jewelry. In 2011, the demand for platinum jewelry has increased by more than 80% in China and by more than 40% in North America. With more turning to precious metalsdue to a loss of confidence in fiat money, platinum will rise in value as a "safe haven asset.' This should appeal to speculators, traders and investors. Platinum is much rarer than gold, as indicted by the price history on the chart below:
Since 2007, platinum has doubled while gold has quadrupled. Historically, platinum sells for about fifty percent more than gold. At present, platinum and gold are both around $1850 an ounce, with Palladium about $750 an ounce. Eventually, this short term pricing inefficiency will be removed as, over the long term, financial markets are efficient. Based on these macro-economic factors and the distortion in the traditional pricing history, platinum and palladium stocks and exchange traded funds should appeal to both small cap investors, traders and speculators.
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