By now, the precious metals rally is known to all. The most
popular precious metal, gold, initiated this momentum spurred by
safe haven demand and dovish central banks across developed
economies. Plus, a favorable demand-supply scenario favored metal
investing to a large extent. A subdued greenback also helped all
precious metals as these are linked to the U.S. dollar (read:
Top and Flop ETFs of 1H
The Chinese market rout and a 13-year low oil price at the start
of the year instigated a flight to safety while Brexit at the end
of Q2 and a still-shaky global market backdrop have still kept
risk-off trade sentiments alive. In fact, the lure for low
volatility products is steady after the U.S. indices hit all-time
highs several times to start Q3 (read:
Low Volatility ETFs in Vogue Despite a Bull
Is Palladium the Best Precious Metal Bet Now?
The interesting fact is that after gold, other precious metals
including silver, palladium and platinum joined the party.
Palladium futures soared to an about
high lately. The metal logged its largest one-month price gain in
in July with several factors backing it.
First, Palladium is used as catalytic converters which put a lid
on unsafe emissions from cars. Now, China's passenger-vehicle sales
the most in 17 months
and hinted at surging demand for palladium from the auto
also believe that after gold's stupendous rally so far this year,
traders may be trying "something new and exciting. Maybe investor
psychology has humans convinced that if they buy something not so
mainstream, maybe they'll make more money."
, "Palladium supplies are expected to fall by 4% worldwide" while
the demand profile is likely to increase 3%.
What About Platinum?
Platinum peaked to a
high on August 10. Here also, the automobile industry alone is
of the world's platinum demand and thus explains why
are surging. Also, platinum is extensively used for jewelry
After Gold, is it Turn for Platinum ETF to
, demand for platinum will likely pick up in India in 2H of 2016 as
demand among young buyers are rising given a 10-12% price gap with
gold. With extremely low platinum prices (at the current level) and
, the spread between two metals is falling and is thus opening a
buying opportunity for consumers.
MMoreover, as per an article published in
, platinum supply is expected to decline 3% year over year this
Inside Soaring Prices
In the last four-week period (as of August 10, 2016),
ETFS Physical Palladium Shares ETF
topped the precious metal ETF list. PALL added 12.4% in this
timeframe followed by 8.6% gains seen in
ETRACS CMCI Long Platinum Total Return ETN
X-Links Silver Shares Covered Call ETN
returned about 1.6% and
X-Links Gold Shares Covered Call ETN
was up about 1.1% (read:
Best ETFs of July
Can the Surge Continue?
On August 10, 2016, PALL hit a 52-week high, gaining about 4.5%.
Sprott Physical Platinum and Palladium Trust
also touched this level, having added about 3.3% on August 10,
Investors should also note that PALL has
positive weighted alpha of 29.20
and SPPP has a
positive weighted alpha of 30.40
. A positive alpha indicates that these surging products can be
exercised a little further. Since palladium is still lagging silver
and platinum form the year-to-date look, the metal still has room
ETFS Physical Platinum
gained over 6.9% in the last one month (as of August 10, 2016). At
present, the fund has
positive weighted alpha of 27.92
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SPDR-GOLD TRUST (GLD): ETF Research Reports
ETFS-PLATINUM (PPLT): ETF Research Reports
SPROTT-PHYS P&P (SPPP): ETF Research
E-TRC UBS LG PL (PTM): ETF Research Reports
CS-SLV SHR CC (SLVO): ETF Research Reports
ETFS-PALLADIUM (PALL): ETF Research Reports
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