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Paper PT out of whack

GreeniejrGreeniejr Posts: 1,321 ✭✭✭
in Precious Metals
Every now and again the physical and paper markets get out of whack and right now that is happening with platinum. Though the physical market is clearly pittance in regards to the paper market, it is pretty obvious the two markets are disconnected. Unlike the paper market which does not require the metal to actually exist the physical market requires it. Right now NOTHING is available. All the big distributors are out of product. Everyone who has it is jacking up prices and the wholesale buys are running up as well and still no one is selling. If this situation ends up anything like the silver shortage of 08, the paper market is going to run up fast and soon. This is of course my highly speculative opinion.

Comments

  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭
    These huge price disconnects have been one of the weirdest aspects of the PM bull run.
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • cohodkcohodk Posts: 19,102 ✭✭✭✭✭
    Probably not much different from the real estate market. Lots of people are still asking very high prices or have pulled their homes off the market. People afraid to "take a loss" not realizing they already have.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • secondrepublicsecondrepublic Posts: 2,619 ✭✭✭
    If people are paying big premiums for physical -- like happened during the '08 crash -- that is a strong indicator that they don't believe the paper prices are real. The market price is by definition whatever people are willing to buy and sell for.
    "Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
  • OverdateOverdate Posts: 7,007 ✭✭✭✭✭
    A 4-coin common date bullion set of platinum (one of each size) just sold for $3322 plus shipping. That figures to about $1,800 per ounce, or a 19% premium to the current plat price of $1515 per ounce. That's a huge disparity between the metal and paper price.

    My Adolph A. Weinman signature :)

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