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1700 Rockville Pike, Suite 400

Rockville, MD 20852

infoasi@assetstrategies.com

1-800-831-0007 (Toll Free)

301-881-8600

9 am - 5 pm EST

Monday - Friday

 

Asset Strategies International is an industry leading full service tangible asset dealer specializing in precious metals, foreign currency and rare tangible assets.


For other products and services:

www.ASIPMDirect.com

800-831-0007

301-881-8600

Fax: 301-881-1936

9 AM - 5 PM EST

infoasi@assetstrategies.com

 

Asset Strategies International

1700 Rockville Pike, Suite 400

Rockville, MD 20852

What’s Rarer Than Gold But Currently Costs Less?

By Teri Lee

Gold may be the most famous of the precious metals, but it’s actually not the rarest. Both platinum and palladium are widely believed to be scarcer, and are often forgotten amongst the hype of gold and silver.

In addition to being rarer, platinum and palladium have numerous important industrial applications. As such, they have experienced dramatic price swings during supply shocks. For example:

  • In 2008, when gold was still below $1,000 per ounce, platinum soared to over $2,100 per ounce.
  • From late 2008 through early 2011, palladium staged an incredible 400% rally; the metal jumped from under $200 per ounce to over $800 per ounce.

It’s also worth noting that both platinum and palladium have once (if not frequently) sold for more than gold:

  • Since 1971, the price of platinum exceeded that of gold 80% of the time.
  • Today, platinum is trading for a 30%+ discount relative to gold. This phenomenon has not taken place since the 1980s!
  • In early 2001, when gold was hovering in the high $200s, palladium was selling for nearly quadruple the price; it peaked at around $1,050 per ounce in January of that year!

A new light now shines on these two metals making them more attractive to investors as they have recently seen lower prices, and are showing a steady increase.

Stansberry Research Analyst, Steve Sjuggerud states, “Platinum actually has quite a few advantages over gold: It is more durable than gold. It doesn’t wear out or tarnish. It’s even cheaper than gold right now. And most importantly, platinum has incredible industrial demand…”

Further, platinum and palladium prices are currently affected by two primary factors which separate them from the rest of the precious metals market:

  1. Their industrial and jewelry demand
  2. Mining interests

These factors, and the reasons behind them, make investing in platinum and palladium an excellent value right now.

Industry Demand

Platinum and palladium are undervalued considering their use in industry and jewelry

Recent developments show an increase in purchases for the auto industry. Both platinum and palladium are essential in the production of cars and the trend does not seem to be slowing down. According to Macro Strategist, Eric Fry of the Oxford Club, “Of the total palladium supply, which includes both newly mined metal and recycled metal, around 85% is consumed by the auto industry. And that percentage trends higher year after year.

With an increase in demand for cars, we can see an increased demand for palladium. A significant demand for platinum and palladium also comes from the jewelry industry. Currently, 30% of all platinum and 10% of all palladium mined is used to make jewelry.

The Volkswagen Scandal

In 2015, the United States accused the German firm Volkswagen of using software for diesel cars that deceived regulators measuring toxic emissions. Volkswagen sales fell, depressing the demand for diesel catalytic converters. These converters account for about 45% of global platinum consumption. Platinum prices were pushed to a 6 1/2 year low.

Some analysts are concerned that Volkswagen's scandal changed consumer attitudes about diesel automobiles. However, most believe the long-term environmental issues highlighted by the scandal will result in even tighter emission standards and the increased use of platinum and palladium. After this event, it seemed like platinum still has not made a full recovery, but pushed palladium prices higher due to recent good press on electric cars which use a lot of palladium.

Mining and Economic Problems

South Africa accounts for the majority of the world's platinum supply and the second-largest supply of palladium. Russia is the second largest producer of platinum and largest producer of palladium.

South Africa’s platinum industry has been mired by problems that have contributed to high production costs. In fact, these costs are now almost level with platinum’s sale price. South African mines are unlikely to deliver enough platinum to meet demand in the near term.

In 2014, more than 70,000 platinum industry workers went on a five-month strike, one that became the longest and costliest in the country’s history.  The workers were all employees of the world’s three-biggest platinum producers: Anglo American Platinum, Impala Platinum, and Lonmin. The losses that resulted from the strike proved to be catastrophic for the platinum industry in South Africa.

Plat and Pall Chart1 F

With platinum selling for under $1,000 per ounce, South African mines cannot cover most of their cash costs, capital contributions and exploration costs. This paints a troubling supply picture, but an encouraging future profit outlook as industrial demand increases.

Our Take on Platinum and Palladium

Given the supply and demand factors for platinum and palladium right now, both metals are worthy of consideration for inclusion in your portfolio. In a nutshell, platinum and palladium are a great buy for these reasons:

  1. Platinum is selling for a huge discount, and is expected to make a recovery soon.
  2. Palladium heavy industries are buying up more and more every year, which will eventually lower supply and increase prices.

Right now, we have two types of platinum and palladium products at unbeatable premiums we feel would be a great addition to your portfolio.

Isle of Man 1-ounce Platinum Nobles

The Isle of Man Noble was the very first platinum coin made available to investors. It was first struck in 1983 by the internationally renowned Pobjoy Mint of Great Britain. These legal tender coins contain exactly one ounce of .9995 pure platinum and are one of the most cost-effective ways to own platinum. We have 150 platinum Nobles available at Spot + $50 per coin*.

Royal Canadian Mint 1-ounce Palladium Canadian Maple Leafs

You may already be familiar with the gold and silver Maple Leaf, but the Royal Canadian Mint has also produced this coin in palladium. As legal-tender sovereign-minted coins, they are among the most liquid, recognizable and secure ways of owning this rare metal. We have 150 palladium Maples available at Spot + $30 per coin*.

Platinum 1-ounce Valcambi bars and Palladium 1-ounce PAMP bars

As worldwide recognized products, platinum and palladium bars are some of the most popular ways to add to your investment portfolio. Each bar is 1-ounce of .9995 fine platinum or 1-ounce of .9995 palladium. The bars are easy to buy, store and sell and are eligible to be placed into an IRA. Platinum bars are available for Spot + $50 per bar*, and palladium bars are available for Spot + $30 per bar*.

Call us at 800-831-0007 or send us an email to purchase your platinum and palladium coins and bars!

Platinum Noble and Platinum Valcambi bar

Palladium Maple Leaf and Palladium PAMP bar

 *Prices are subject to change based on product availability and market fluctuation. Prices reflected are for cash, check, or wire transfer only. Offer expires May 25, 2017.

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1-800-831-0007 (Toll Free)
301-881-8600

Fax: 301-881-1936

infoasi@assetstrategies.com

8AM - 5PM EST, Monday - Friday

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