No support to platinum at $1K
According to Andy Hecht’s learning, the price of the active month October platinum futures on the NYMEX division of the CME rose from $793.70 at the end of May to a high at $1000.80 per ounce during the first week of September. Platinum rose to its highest price in 2019, and since early 2018.
While the price of platinum rose by over 26% in a little over three months, the precious metal lagged the price action in gold and silver. Gold rose to its highest price since 2013, and silver made it to a level that it had not traded at since 2016. Meanwhile, two other members of the platinum group, palladium, and rhodium have been in raging bull markets since 2016. The prices of the two other platinum group metals have reached levels that dwarf the price action in the platinum market.
Platinum is a rare precious metal with the highest density and resistance to heat. Over the past years, the value proposition for platinum has been compelling, but the price did not respond as it lagged gold, silver, palladium, and rhodium. While none of the other metals have tested their late 2015 and early 2016 lows, platinum fell to a lower low in 2018.
The recent rally to just over the $1000 level ran into selling sending the price back below $950 per ounce last week. However, signs of bullish life in the platinum market could be a reason to add platinum to your portfolio during the current pullback. The next time platinum probes above the $1000 level, it could blow through the level like a hot knife glides through a stick of butter.
The most direct route for investment in platinum is via the physical market for bars and coins or the futures that trade on the NYMEX division of the CME. The futures allow for physical delivery, which makes them as good as the physical metal. The Granite Shares Platinum Trust product (PLTM) is an ETF that offers exposure to the price of the metal with a value proposition like no other.
The price of platinum rebounded to just under the $1920 level in 2011, the year that gold rose to its record high. Platinum made a lower high compared to its peak in 2008. At the lows in 2008, gold fell to $681 and silver to $8.40 per ounce when platinum fell to $761.80. Meanwhile, gold has not traded below $1000 since 2009 and nowhere near its 2008 bottom. Silver has not dipped below $10 since 2008. However, platinum fell to $755.70 in August 2018, which was lower than the 2008 bottom and the lowest price for the metal since November 2003.
