Tuesday, March 4, 2014
Gold and silver are getting all the headlines right now.
After a miserable 2013, both precious metals are enjoying big gains this year. Gold is up over 12% in just a little over two months. Silver is up over 10%.
But there's another precious metal that has been quietly rallying this year. It's up about 10% since late December. And it looks like it will soon steal the headlines from gold and silver...
Platinum could be the big winner in the precious-metals market this year.
The metal is 30 times rarer than gold. Most of the world's supply of platinum comes from the Bushveld geological structure in South Africa – where most of the "easy to get" metal has already been extracted. There's still plenty of platinum in the structure, but getting it out of the ground is growing more and more expensive. This will keep pressure on the available supply.
Meanwhile, demand for platinum is increasing. Not only does it represent a store of value as a precious metal, but it also has industrial applications for use in electronics, automobiles, dentistry, and jewelry. So the supply/demand equation is shifting in favor of higher platinum prices.
And any investor who thinks gold is cheap at the current price has to like the idea of buying platinum here. For most of the past two decades, platinum traded for an average 70% premium to the price of gold. Today, that premium is just 10%.
Finally, platinum looks ready to stage a major breakout. Take a look at this chart...
The chart has developed an inverse "head and shoulders" formation. This is a bullish pattern that often signals the reversal from a bearish trend to a bullish one. If platinum can break above the "neckline" of the pattern at about $1,470 per ounce, the projected target is up around $1,600 per ounce.
Traders interested in taking a position in platinum can buy the metal itself, or they can buy a platinum fund like the UBS Long Platinum Fund (PTM) or the Sprott Physical Platinum and Palladium Trust (SPPP).
Best regards and good trading,
Matt Badiali agrees platinum is headed higher – thanks to China's need for cars. Although China has had record auto sales, Matt says it's creating a serious problem: pollution. And to cut that pollution, China needs platinum. Get all the details right here.
"The platinum market is vulnerable to a major supply shock," Editor in Chief Brian Hunt writes. And master resource investor Rick Rule thinks the dwindling supply will make prices soar. Find out how high Rick thinks it will go here.