Palladium and Platinum: Still Time To Profit?
Investors are still having their love affair with palladium. The precious/industrial metal is the third best performing commodity on the year with gains of 14%. Only coffee and lean hogs are seeing larger advances.
And let’s not forget platinum. Palladium’s big brother is performing solidly as well with year-to-date gains of 7.8%.
Given the solid advances for both metals, one has to wonder how much upside is left.
Let’s take a look…
As I’ve mentioned in previous articles, the situation in Ukraine is having a bullish effect on palladium. Investors are concerned potential sanctions against Russia will reduce palladium exports out of the country.
In case you’re unaware, Russia is one of the world’s largest suppliers of the metal along with South Africa. Together the countries account for nearly 80% of global palladium supply.
Speaking of South Africa…
Labor negotiations at some of the biggest platinum/palladium mines in the world are turning violent. Workers for Anglo American Platinum, Impala Platinum, and Lonmin have been striking for months in search of higher pay. Four miners were killed last week as they attempted to bypass a union picket line and return to work.
Production at these mines will likely not resume until mine owners and unions come to an agreement. According to Commerzbank analysts, 10,000 ounces of platinum and 5,000 ounces of palladium are lost each day the strike carries on. And even when miners return to work, it will take another three months to restart production.
All this news is adding to fears of a supply shortage…
Strength in the global economy has automobile sales breaking records. In fact, global car sales rose to an all-time high of 82.8 million in 2013. According to IHS Automotive, global car sales will likely rise to 100 million by 2018.
As you may know, approximately 50% of global platinum and palladium supply is consumed by the automotive industry. The metals have unique chemical properties that make them a prime auto catalyst.
You can see the writing on the wall here folks…
Demand for platinum and palladium is growing swiftly while supply is lagging.
The only cure for this issue is higher prices.
Subscribers to my flagship commodity investing service, the Commodity ETF Alert, were made aware of platinum and palladium’s long-term bullish supply/demand picture in mid-2013. Ever since then, I’ve recommended buying price dips in both metals.
As of today, subscribers are still holding commodity ETFs that are tracking platinum and palladium to higher prices.
But here’s the best part…
I believe the bullish moves in platinum and palladium are far from over. If you’d like to discover how you could potentially profit from this situation, click here.
Until Next Time,
Justin Bennett
Category: Palladium, Platinum, Precious Metals
