Platinum Hits Record Today
wondercoin
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Here is an article that came out this morning. I was surprised to read that 58% of all worldwide demand comes from the auto industry alone. Interesting read:
"Platinum Rises to a Record as Hedge Funds, Speculators Seek to Diversify"
Platinum Rises to a Record on Buying by Speculators and Funds
Jan. 16 (Bloomberg) -- Platinum rose to a record in London as hedge funds and investors bought the metal used in jewelry and catalytic converters for cars to diversify their portfolios and seek better returns than on equities and bonds.
Platinum has gained for four consecutive years, including 13 percent last year. The Standard and Poor's 500 Index of stocks rose 3 percent last year. U.S. notes and bonds returned 2.8 percent, according to Merrill Lynch & Co.
``Fund buying, particularly in Japan, has driven platinum prices up,'' Michael Widmer, an analyst with Macquarie Bank Ltd. in London, said in an interview today. ``The platinum market has been in deficit for quite some time. There is a lot of money going into commodities at the moment.''
Platinum for immediate delivery in London rose as much as $14.75, or 1.4 percent, to $1,050.25 an ounce. That beat a record of $1,047.50 set March 5, 1980, according to data from Johnson Matthey Plc, the world's largest distributor of platinum-group metals. Platinum traded at $1,049.50 as of 4:08 p.m. London time.
Investments in funds that track commodity indexes may surge 38 percent this year to $110 billion, according to Barclays Capital.
Platinum prices are also being buoyed by a shortfall in supplies of the metal, mined mostly in South Africa and Russia. Demand has exceeded supply for seven consecutive years, according to London-based Johnson Matthey.
Most of the extra demand in that period has come from carmakers, which use the metal in catalytic converters. Carmakers used 3.86 million ounces last year, representing 58 percent of global demand, from 1.89 million ounces in 2000.
More Palladium
The average catalytic converter carries between 4 and 5 grams of precious metal. Until recently, diesel cars could only use platinum in their catalysts, while gasoline-fueled cars could also use palladium, which is trading at about one quarter of the price.
That may encourage carmakers to switch to using more palladium. Brussels-based Umicore SA, the world's No. 3 maker of catalytic converters, last year introduced a system for diesel cars that uses a catalyst made with both platinum and palladium.
Carmakers can now substitute as much as 25 percent of the platinum found in diesel car catalysts with palladium, Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Heraeus Holding GmbH, a precious-metals company in Hanau, Germany, said in a Jan. 11 report.
Stricter environmental legislation is forcing carmakers to produce cleaner vehicles. European laws effective this year reduce by half the amount of nitrogen oxide and hydrocarbon, a major cause of pollution, new cars can emit.
To contact the reporter on this story:
Danielle Rossingh in London at drossingh@bloomberg.net
Last Updated: January 16, 2006 11:40 EST
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It will be interesting to see whether the record price on Platinum keeps collectors/dealers away from buying the MS bullion coins this year - like last year where platinum was up 13% for the year and the US Mint's production of 1 oz MS bullion coins was around the same record low as in 2004 where it sold a scant 7,009 coins. Compare with 1998 where the mintage was over 133,000.
Wondercoin
"Platinum Rises to a Record as Hedge Funds, Speculators Seek to Diversify"
Platinum Rises to a Record on Buying by Speculators and Funds
Jan. 16 (Bloomberg) -- Platinum rose to a record in London as hedge funds and investors bought the metal used in jewelry and catalytic converters for cars to diversify their portfolios and seek better returns than on equities and bonds.
Platinum has gained for four consecutive years, including 13 percent last year. The Standard and Poor's 500 Index of stocks rose 3 percent last year. U.S. notes and bonds returned 2.8 percent, according to Merrill Lynch & Co.
``Fund buying, particularly in Japan, has driven platinum prices up,'' Michael Widmer, an analyst with Macquarie Bank Ltd. in London, said in an interview today. ``The platinum market has been in deficit for quite some time. There is a lot of money going into commodities at the moment.''
Platinum for immediate delivery in London rose as much as $14.75, or 1.4 percent, to $1,050.25 an ounce. That beat a record of $1,047.50 set March 5, 1980, according to data from Johnson Matthey Plc, the world's largest distributor of platinum-group metals. Platinum traded at $1,049.50 as of 4:08 p.m. London time.
Investments in funds that track commodity indexes may surge 38 percent this year to $110 billion, according to Barclays Capital.
Platinum prices are also being buoyed by a shortfall in supplies of the metal, mined mostly in South Africa and Russia. Demand has exceeded supply for seven consecutive years, according to London-based Johnson Matthey.
Most of the extra demand in that period has come from carmakers, which use the metal in catalytic converters. Carmakers used 3.86 million ounces last year, representing 58 percent of global demand, from 1.89 million ounces in 2000.
More Palladium
The average catalytic converter carries between 4 and 5 grams of precious metal. Until recently, diesel cars could only use platinum in their catalysts, while gasoline-fueled cars could also use palladium, which is trading at about one quarter of the price.
That may encourage carmakers to switch to using more palladium. Brussels-based Umicore SA, the world's No. 3 maker of catalytic converters, last year introduced a system for diesel cars that uses a catalyst made with both platinum and palladium.
Carmakers can now substitute as much as 25 percent of the platinum found in diesel car catalysts with palladium, Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Heraeus Holding GmbH, a precious-metals company in Hanau, Germany, said in a Jan. 11 report.
Stricter environmental legislation is forcing carmakers to produce cleaner vehicles. European laws effective this year reduce by half the amount of nitrogen oxide and hydrocarbon, a major cause of pollution, new cars can emit.
To contact the reporter on this story:
Danielle Rossingh in London at drossingh@bloomberg.net
Last Updated: January 16, 2006 11:40 EST
******************************************************
It will be interesting to see whether the record price on Platinum keeps collectors/dealers away from buying the MS bullion coins this year - like last year where platinum was up 13% for the year and the US Mint's production of 1 oz MS bullion coins was around the same record low as in 2004 where it sold a scant 7,009 coins. Compare with 1998 where the mintage was over 133,000.
Wondercoin
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Comments
Nothing beat lining up all the platinum proof reverses up and looking at them, especially 1998-2002
Just (1) thing beats that - lining up 2003-2005's coins!!!!!
Check out this auction that just got listed on ebay (I have no idea who the seller is or the high bidder):
2004 Proof Plat Set (RAW)
This set sold from the US Mint for $2,495 through 3/05. The new level on these sets (raw) appears to be in excess of $6,400 - that is the level I believe some dealer to dealer activity took place today. If my math is right, this mint product has seen around 160% growth in the past 10 months. Even more money for PCGS grade PR69DC coins. If the set trades at $7,485 by March, 2006, you are looking at an 1 year annual return of 200% on this RAW modern set. There are roughly 5,000 of these sets in the world (final figures not fixed yet by the mint I believe). The 1995(w) Silver Eagle continues to surprise many folks with its strong rise into the mid-$5,000's for a PCGS-PR69DCAM coin (and it now has close to $10 worth of silver in it as well). Compare that mintage of 30,125 on that silver eagle (single coin) to the roughly 5,000 mintage for the 2004 (4 separate coins) Plat set (with more than $1,900 melt value today as well). Not one, but two of the (4) coins in this set have mintages around just 5,000-5,250 coins. Hence, my comment that it is probably quite a bit of fun lining up the 2003-2005 plats as well, reverses up, and enjoying them.
Wondercoin
Big payday for Robert - congrats!! Annual return on these particular moderns now approaching 250% and we are not talking about $50 trinkets here.
Wondercoin.
58%?
Better hope they don't find a substitute so demand/price will stay up there.
That does concern me long term, and the effect it might have on my platinum collection.
RR
<< <i>Most of the extra demand in that period has come from carmakers, which use the metal in catalytic converters. Carmakers used 3.86 million ounces last year, representing 58 percent of global demand, from 1.89 million ounces in 2000.
58%?
Better hope they don't find a substitute so demand/price will stay up there.
That does concern me long term, and the effect it might have on my platinum collection.
RR >>
I think platinum is the substitute for palladium when palladium was around $1000/oz a few years ago.
Maybe they will switch back to palladium, so I can buy my 2004 plat proof at a lower price.
And to think not really liking the reverse of the 2004 is one of the reasons why I didn't buy it from the mint.
Wondercoin.
How many ounces of platinum would be a complete registry set of proof and ms platinum eagles of all denominations?
At $1050.00/oz Platinum, you are then looking at "melt" on a collection of $38,850.
By the way, that raw set of 2004 Proof Plats I mentioned above, sold for over $8,200 RAW as that set continues to set new record high sell prices.
Wondercoin
By next year, the melt value alone of the Platinum Statue of Liberty collection may well be into the $40,000's (assuming Platinum stays above $1,000/oz)! This has nothing to do with certified high grade coins and their added value. What a neat collection to assemble.
And, to think - Rhodium sells for 3x platinum. Let's hope the Mint never decides to issue the "Rhodium Eagle collection".
IMHO the 2004 proofs are a little over priced(1% to 2 % total grade rate to date), but hey its all about a willing buyer and seller.
Anyway, what does it take to get PCGS to report the 2005 multi-coin holders to keep the pop reports as accurate as possible. PCGS people do not respond even when they say they will, my recent calls are not returned,and the e-mail responders are short on information. Last year, Mike Sherman helped with the 2003 and 2004 years... but this year... customer service is terrible.
I feel the Plat collectors deserve better.
BBpM
#1 PCGS Registry Set 100 MS Plats.
Wondercoin