PLATINUM holdings in exchange-traded funds (ETFs) have surged to a record, raising the prospect of a catch-up rally for the precious metal after months of lagging gold and silver.
More than 600,000 ounces of platinum have been added to ETFs since mid-May, according to data compiled by Bloomberg, as investor demand partially offsets a drop in consumption from jewelry and the auto industry crippled by the coronavirus pandemic.
The buying spree was driven by investors who thought they were missing out on the recent rally in gold and silver, said Nitesh Shah, director of research at WisdomTree.
There’s also probably been some money taken as a profit from gold and silver and added into platinum because it’s still relatively cheap compared with its peers, he said.
Most major precious metals have had a banner year in 2020 as governments and central banks including the Federal Reserve unleashed vast stimulus to aid economies hurt by the health crisis, sending investors to seek safety in hard assets amid concerns over currency debasement. Gold has rallied 29% this year, while platinum is still down about 3%.
“Platinum does seem like one of those metals that could be next if historic correlations are any guide, ” Shah said. — Bloomberg