Platinum vs Gold Update 2016

Platinum vs Gold Update 2016


Welcome to illuminati silver, we tell you
the truth about silver. Today is Monday 12th September 2016 and we
are providing our views on the case for and against Platinum.
Since 1st January 2016 Platinum has risen by some 22% compared to 25% for gold and 39%
for silver With Platinum currently priced at $1062 per
ounce compared to gold which today stands at $1328 one can see that gold is trading
at a 25% premium to platinum. Many investors find this strange, especially when one considers
that historically, platinum often sells for about 1.5 times the value of gold per ounce.
There are a number of arguments as to why this situation may eventually recover.
1. According to Tom Winmill of the Midas Fund, “Platinum has been at a sustained discount
to gold only four times in the past 40 years and …. In all cases it recovered in the
subsequent year.” – indicating that the platinum-gold discount normally reverts to
a premium. 2. Platinum demand exceeds supply. Last year,
mining and recycling produced 7.82 million ounces of platinum. But according to the World
Platinum Investment Council demand was 8.2 million ounces – the difference coming from
“inventory,” or above-ground stocks. However this is likely to prove short lived as the
above-ground stock of platinum is estimated at 2.3 million ounces, or about 28% of demand
3. Platinum is difficult to mine and smelt. South Africa accounts for almost 73% of the
global platinum production but mining is often hindered by strikes and electricity outages.
Meaning that shortages cannot quickly be made up.
4. Unlike gold, platinum is used pretty extensively in industry. This could help explain the unusual
discount to gold. After all, many investors remain fearful that the global economy and
manufacturing are going to recess further and especially in China. However, U.S. Global
Investors CEO Frank Holmes expects improved growth in China. He thinks job growth in China
will boost demand for cars, which will spark demand for platinum. In any case, a modest
global growth figure of 1.5% – 2% will be sufficient to see demand for platinum continue
to rise. 5. Another problem for platinum is, and has
been, the Volkswagen emissions scandal which has turned investors away believing that demand
for its diesel-engine cars will be weak for some considerable time. However to counteract
this, diesel cars are still proving popular, especially in Europe as they are more economical
to run than petrol or gasoline vehicles. Of course it goes without saying that it’s
difficult to abandon or replace diesel trucks with an alternative.
Well they are the 5 main reasons for Platinum to gold recovery; now let’s look at 4 reasons
why that may not happen. 1. Not everyone agrees that the unusual platinum-gold
price differential has to narrow more and eventually revert to a premium. The argument
follows that weak global growth will put a lid on industrial demand which creates an
adverse price point for platinum. 2. Platinum has only risen on the coat tails
of gold, though it is more of an industrial metal and that this price increase will falter
as investors realise that only gold truly serves as a substitute for money. In other
words, Platinum is also benefiting from the tailwind provided to gold by the fading prospects
of the Fed rate hike. 3. Zhiwei Ren, Managing Director and portfolio
manager with Penn Mutual Asset Management, which has $20 billion under management, thinks
commodity prices are up in part because of government-induced credit expansion in China
aimed at boosting growth. This has fuelled speculation in commodities. But this source
of demand for metals like platinum may not last, he says.
4. Technology advances now allow catalytic converters to be made with much less platinum,
a trend that will continue. Meanwhile, more of the metal can be harvested from recycling
old converters, also because of better technology. So what does the Industry body have to say?
Well, according to the World Platinum Council….. “the platinum market is forecast to have
a full year 2016 deficit of 520 koz. We are confident that the fundamentals behind platinum
remain strong, will be so for the foreseeable future and will continue to present a compelling
case for investors. While a surplus was recorded in the second quarter, this was largely attributable
to the South African refinery outage in Q1 and the associated processing of backlogged
concentrate when refining resumed in Q2. We continue to see little evidence to support
rising output over the medium term. Platinum production from South Africa, the largest
producer, has failed to reach the levels observed in 2013 and 2015. Real cost increases due
to labour costs – which account for over 50% of overall mining costs – continue and,
together with low metal prices, they have driven the fall in capital investment across
this industry. Sustaining current output is harder as a result….. Overall, we firmly
believe that platinum supply will remain constrained for the foreseeable future.”
So what do we conclude from all this we hear you ask? Well as always it’s never clear
cut, otherwise we would all be taking out call or put options and retire to the Maldives
or some other Caribbean Island with the ensuing profits.
Notwithstanding this, without doubt the factors to bear in mind are:
1. Value of the dollar 2. Value of the South African Rand
3. Supply shortages 4. World economic growth or lack of it.
Our view is that short term, platinum will continue to move in a similar direction to
gold. However if there is an economic crisis, which many predict, then gold will outpace
platinum. If there is economic revival, then the reverse will occur and platinum will ride
high again. We on balance prefer gold currently as we are still not convinced about world
economic growth and we still foresee some considerable turmoil as the result of the
US elections reveal themselves, and especially if Donald Trump becomes the favourite to win.
Not necessarily because he would be bad for the US but because he is an unknown, and markets
like certainty. On balance we would prefer to wait a few more
months before considering moving into platinum, especially in a big way. Any surplus monies
we are now putting into gold again, especially as it may have a small knock down because
of the ever increasing threats of higher interest rates which frankly are not likely to occur
for some months yet. We hope you have found this video interesting
and informative and if so, please give it a thumb up and share it on twitter. Also kindly
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is updated daily can be found at facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.

37 Comments

  1. Great video I.S.! I I agree with you guys ,I like gold lately ,and have been buying a 1oz coin about any time the price gets bombed for a day . I hang out and wait for it to happen again over and over . you sound like your good ole self! I think you even made a small joke πŸ™‚ thanks again for now I really like gold and think its at a cheap price right this minute.

  2. Please stay bullish on Gold even if the price fall from Sept 30 to the end of this year. We can then expect a slingshot move going into January 2017 and fantastic new Highs.

  3. I have been waiting for a video on Pt. I am a huge fan of gold but Pt at these prices are so cheap it's a steal. I know central banks stack gold, and Pt is newer to the table than gold and silver, that is why most stackers are bullish on gold rather than Pt. Nevertheless, the mining stocks look attractive, but if you are a physical type of person then buy the real thing.

  4. Great video much appreciated. Thank you.

    With most of the worlds Platinuim supply limited to one region it makes a good speculative investment in the event of supply shocks, along with Rhodium, but gold will always be the core holding precious metal component of my portfolio. All PM's are at a good price to accumulate imo.

  5. Thank you for this report. Many variables to consider. But I will always adore my one platinum proof eagle. The shine and detail is like no other.

  6. Thank you. You have clearly outlined the case for and against investing in platinum at this time. My personal preference is to continue to invest in gold. My "industrial" exposure is to acquire a small amount of silver but gold continues to dominate my pm portfolio at this time. For the reasons provided in the later part of your presentation, I cannot see any justification in acquiring platinum in the current environment.

  7. Mrs Google says platinum is so rare, the total ever mined would fit in your living room! If gold to silver to platinum price ratios should tighten, some trading may be in order for a short time.

  8. "Maldives or another Caribean Island" , the last time i checked, Maldives was in the Indian Ocean. Its ok, geography can be confusing. Keep up the great work!!!!

  9. I'm viewing platinum as an excellent long term investment, so my focus is on platinum over gold. It has dropped further since I bought some last year, but it was still at a discount to gold and is still an attractive alternative.

  10. Now is the time to buy platinum! The only thing that scares me is Palladium can always replace Platinum so would this smash the platinum price down?

  11. It could all turn around as the medical Industry also uses Platinum. Hasn't anyone also heard of a new Platinum based therapy they offer? The bottom line to me is this…. Gold can replace money, that's true. Platinum, however, has more uses than Gold, plus it's rarer than Gold. If a mine ever runs out, that is the time they will be asking people to sell theirs. It could happen, also a popularity in Platinum wedding rings & other jewelry has spiked over the years as well. That's what I chose for my & my hubby's bands as he is especially hard on rings & Gold was too soft for him. This was back in the 80's before they offered Tungsten. The problem with Tungsten is it can't be resized.

  12. Gold is gold standard metal used inJewelry. China and India are the driving force behind the most gold trading. The most privately owned gold are by Indians and Chinese. People in India estimated to have over 24000 tonnes of gold vs United States reserve around 8000 tonnes.

  13. I appreciate the knowledge you are imparting. However, i can't overlook the maniacal tone of your voice alluding to a grand Bond villain-esque scheme.

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