According to Rezco Asset Management investment director Robert Spanjaard, 2012 started with a platinum supply surplus. However, it very likely that 2012 will end the year with platinum supply deficit, and this will push spot prices higher. Investing in physical platinum bullion is better than investing in platinum stocks. South Africa is the globe’s leading supplier of platinum, yet most mines are not making any money. Investing in platinum shares is not prudent at this time. On the other hand, expect tangible platinum bullion to rise in 2013
Spanjaard goes on to say, most platinum mining companies are receiving the same income on their production outputs they were 5 years ago. Yet, expenses have increased by a significant margin. Well intentioned safety measures put in place in response to work stoppages have reduced the efficiency of the mines, and with a supply deficit expected for 2012 platinum bullion should spike in price.
London-based research company Johnson Matthey reviewed the platinum mining situation in South Africa back in November of 2012. They predicted that supplies will fall because of continued strikes and work stoppages. Last year South African mines enjoyed a 430 000 ounce surplus of platinum, however 2012 is likely to see a deficit of 400 000 ounces. While this will have a negative impact on mining shares, physical platinum bullion will enjoy a significant boost in its spot price early on in 2013.
Platinum is a major component of catalytic converters and jewelry, and both industries are enjoying high sales. Johnson Matthey expects jewelry sales to increase by up to 14 percent over current levels, and China’s continued appetite for automobiles bode well for a high platinum spot. This places more strain on an already disrupted platinum supply chain to meet continued high industry demand. Prudent investors should buy at the current undervalued spot price, which is currently below $1600 per once, before the spot spikes in 2013.
Since platinum mining stocks are not considered a good investment at this time, buying physical monex platinum bars or coins offers the best investment opportunity. Platinum bullion is available in 10 ounce bars for personal delivery or storage, and is ideal for large buyers. Furthermore, American Platinum Eagles offer a handy way to buy platinum. If you already invest in tangible gold and silver you should seriously consider upgrading your portfolio to platinum. It trades at a high spot price, and offers speculative financial gain, because platinum’s spot can be volatile at times.
In conclusion, supply deficits and high demand from the automotive and jewelry industry make a platinum spike in price quite likely. Gold and silver offer investors a reliable safe haven against rocky stock markets and inflation. Add the speculative profits that platinum offers and 2013 could be a big investment year, because gold and silver are set to rise too. We can expect higher inflation because the FED is busy pumping billions of paper dollars into the economy. Gold, silver, and platinum will rise in price as the dollar continues its downward descent. Buying your precious metals from monex.com, the most trusted name in precious metal investing is the solution to this problem.
