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You're Nuts if You Own Gold Instead of This

By Tom Dyson, editor, S&A Penny Trends
Thursday, April 9, 2009

I don't know why anyone would trade gold when they could trade platinum right now...
 
Platinum does everything gold does... It's a store of value, it works as money, it's easy to hide, it's durable, it looks beautiful as jewelry, and I could go on. From a trading standpoint, it also has some huge advantages to gold...
 
First, platinum's major demand comes from industrial users, especially the auto industry. You might think that's a bad thing, but I see it as an advantage. Think what happens to gold once it's mined: It sits in vaults, in safety deposit boxes, or in people's jewelry boxes. It never disappears. When sentiment changes or the price gets high enough, this "scrap" gold floods the market and suppresses prices.
 
But with 80% of platinum demand from industry, each year automakers sweep that platinum off the market and bury it inside catalytic converters. It can't come back as supply. And economically sensitive assets are rallying hard right now.
 
Uses
Platinum
Gold
Investment
2%
16%
Industrial
80%
25%
Jewelry
18%
59%
Source: Bank of America/Merrill Lynch
 
Second, platinum is 15 times rarer than gold. And 80% of its supply comes from South Africa. There is a much greater supply risk. Gold is produced all over the world.
 
Finally, the gold-platinum ratio is at a 12-year low after platinum's crash in 2008... but platinum has broken out and is now moving up against gold as well as the dollar.
 
Take a look at this breakout...
 
 
Platinum just hit its highest high since September. The platinum exchange-traded fund (PTM) is one of the five best-performing ETFs of the 88 I've followed over the last three months.
 
Don't get me wrong... I own plenty of gold as a "crisis hedge." But if you're shooting for really big gains in the precious metals market, you're nuts if you ignore platinum.
 
Good trading,
 
Tom




In The Daily Crux Recent Articles
Market Notes
Insurance stocks surge on news of gov't bailout.
 
Off-brand sodamaker National Beverage attracts discount shoppers... up 13% this year to 52-week high.
 
Retail stocks forecast consumer recovery... Bed Bath & Beyond up over 20%, retailers up across the board.
 
Earnings today... Chevron, Pep Boys.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1223.12 -0.1% +10.6%
Oil 38.22 -0.2% -0.3%
Gold 139.11 +0.8% +22.3%
Silver 29.51 +3.2% +62.6%
US-Dollar 79.17 -1.3% +4.3%
Euro 1.33 -0.8% -10.4%
Volatility 18.02 +0.1% -15.2%
Gold Stocks 590.99 +1.6% +25.5%
10-Year Yield 2.94 -2.7% -15.5%

World ETFs
Symbol Price
Change
52-Wk
USA 122.76 -0.1% +10.6%
Canada 30.56 +0.2% +18.0%
Russia 21.98 +0.2% +17.2%
India 37.92 +0.2% +19.4%
Israel 16.76 +0.4% +10.4%
Japan 10.69 +0.5% +7.0%
Singapore 13.71 -0.2% +18.1%
Taiwan 14.92 +1.0% +20.2%
S. Korea 57.19 -0.2% +21.5%
S. Africa 72.26 +0.5% +29.7%
China 43.84 -1.3% -3.3%
Lat.America 53.21 +0.1% +9.2%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.74 +0.1% +20.2%
Big Pharma 63.99 -0.2% -3.2%
Internet 72.58 +0.7% +25.0%
Semis 16.18 -0.3% +26.4%
Utilities 31.19 -0.3% +1.8%
Defense 18.47 -0.3% +8.9%
Nanotech 10.08 +0.5% +1.3%
Alt. Energy 10.24 +1.6% -2.0%
Water 18.62 +0.7% +13.8%
Insurance 16.08 -0.4% +19.0%
Biotech 20.56 +0.1% +26.6%
Retail 19.59 -0.6% +26.6%
Software 24.65 -0.6% +22.7%
Big Tech 53.85 0.0% +22.1%
Construction 13.20 +0.8% +14.8%
Media 13.73 +0.7% +24.7%
Consumer Svcs 67.38 0.0% +23.4%
Financials 55.01 -0.1% +5.7%
Health Care 63.90 -0.6% +1.2%
Industrials 63.51 -0.1% +19.3%
Basic Mat 74.64 +0.4% +27.8%
Real Estate 55.35 +0.1% +21.8%
Transportation 91.39 -0.4% +23.9%
Telecom 22.65 +0.3% +16.8%