Those who invest in physical precious metal generally do so with a modest part of the portfolio and for the longer term. This was also apparent during the poll that GoldRepublic held during our visit to DFT. When we asked what percentage of people ideally held in precious metal, it turned out that 76% of the respondents had invested between 5 and 15% of their portfolio in precious metal. The conversations we have with some of our customers at GoldRepublic every day also show that people rarely get in for the shorter term.
Nevertheless, it is good to identify the short-term rises and falls in precious metal prices and to try to understand what they mean.
Recently we have seen a interesting movement in the price of platinum. This metal cost $ 849 per ounce on April 1, for example, the futures of Thursday, April 4, indicate that platinum is $ 890 per ounce. An increase of more than 4% over a very short time period.
Where Is The Possible Cause Of This Increase?
Platinum has had a particularly difficult time in recent years. After the metal stood at $ 1875 an ounce on April 1, 2011, the fall that platinum started after sharp and painful. In September 2018, however, the bottom seemed to have reached $ 787 per ounce and the price has since stabilized. Starting January 1, 2019, the price has now risen by about 10%. And that increase in price doesn't seem unjustified.
Platinum production is very low compared to silver and gold. With approximately 190 tonnes of production each year, should that production ever stagnate, the above-ground supply of platinum will run out in a few months. With important applications for which platinum is used such as in the production of cars, the price is expected to rise rapidly in such a case.
And in addition to gold and silver, platinum is now known to the wider public, and a good argument could be made that it can be seen as monetary metal in the event of a crisis. Ad it wasn’t that long ago that platinum was more expensive than gold. Today, with a price difference of more than 400 dollars an ounce, a position in platinum appears to be an attractive proposition.