(Kitco News, Thurs. Aug 27th, 2020)
(Kitco News, Thurs. Aug. 27th, 2020) – As gold consolidates above $1,920 an ounce but struggles to re-take the key psychological level of $2,000, investors are turning their attention to platinum, according to Commerzbank.
“Whereas demand for gold ETFs is cooling – there were even slight outflows yesterday – investors are increasingly throwing themselves into platinum,” said Commerzbank analyst Carsten Fritsch. “Platinum ETFs saw inflows of 42,000 ounces at the start of the week. Since beginning in late July, inflows have now totaled 360,000 ounces.”
There is a chance that the platinum market will see a supply deficit this year, which is in contrast to previous expectations, noted Fritsch.
The value of choosing platinum over gold is quite clear — just look at the cost, the analyst pointed out.
“It is obvious why there is so much buying interest in ETFs: platinum is 4.5% down on the start of the year, and has therefore underperformed gold significantly. This is also evident in their relative valuations: platinum is currently around $1,000 per troy ounce cheaper than gold, a price differential that had even peaked at $1,080. Recently it embarked on a race to catch up, as could be seen yesterday when platinum gained by a good 1%, whereas gold fell slightly.”
At the time of writing, October platinum futures were trading at $941.20, up 0.77% on the day.
Other analysts have also began to recommend buying platinum instead of gold.
Gold’s premium over platinum has blown out to nearly record levels recently pushing well above $1,000, World Platinum Investment Council (WPIC) head of research Trevor Raymond told Kitco News this week.
“We see a lot more gold investors looking at platinum, as either a proxy for gold or potentially something that might outperform in the short term,” Raymond said. “What we’ve seen since April is about 400,000 ounces of investment demand going into ETFs. Platinum is a much smaller market … only a small amount of additional investment into platinum can make quite a big difference to the fundamentals.”
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com