SOURCE:[Forbes] – So, to mark the demise of the trillion-dollar coin idea, platinum just did something it’s not managed in almost a year. Its price rose above the price of gold Tuesday morning for the first time since mid-March 2012.
Indeed, while gold and related cash-price proxies like the big SPDR Trust (NYSE:GLD) have risen 1.0% since New Year’s Eve, and the SLV is up a bit more, the price of platinum – most easily traded by private investors through the white metal’s ETF, PPLT – has risen by 11.4%.
Platinum’s primary use meantime – in catalysts for petrol engines – is enjoying something of a bounce back. German auto-giant Volkswagen reported on Monday that its sales rose 11% last year. Claiming that “the cyclical recovery in global auto sales that began in mid-2009 remains intact,” analysts at Scotiabank now forecast “Record global car sales for 2013“
Commentary: Platinum, and its cousin palladium, is different from gold in that its price is driven more by industrial demand than investor demand. Also, its supply is much more limited while demand is increasing. Any disruption to supply (which is likely) can put tremendous upward pressure on platinum/palladium prices.
Gold on the other hand is mined throughout the world. Any disruptions have minimal impact on overall supply. Since platinum is only mined in 3 or so countries in the world, disruptions can lead to skyrocketing prices.
It’s quite possible that over the next few years, platinum will surpass gold in terms of price and climb higher at a faster rate.