Trend change in platinum-gold relationship?

For many months, I have witnessed a trend toward resource nationalism, which is taking a major toll on the potential supply of platinum (PTM) where more than 90% comes from South Africa, Zimbabwe and Russia. These are far from safe mining jurisdictions. Simultaneously, auto sales are rebounding to levels not seen since before the credit crisis in early 2008.

Despite global supply concerns, increase of resource nationalism and rising industrial and automobile demand, platinum is still undervalued compared to gold (GLD). The platinum price is still far below pre-credit crisis highs, while gold and silver (SLV) are almost double 2007 highs. This may be a short-term phenomenon and over the long term PGM's may provide a great buying opportunity and catch up to gold (IAU) and silver (AGQ).

More than 90% of platinum (PPLT) supply originates from South Africa, Zimbabwe and Russia. Zimbabwe has recently nationalized the assets of Zimplats. This could have a major impact on potential supply and may increase interest for advance platinum assets in geopolitically stable mining jurisdictions.

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