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Platinum, what is the best play?

Fjpod

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#1
I may be a little late to the game, but with Platinum selling for less than gold, what might be the best way to make a play? Physical? Paper? Stocks?

To me, this wouldn't be a longterm, doomsday stacking. It's more of a market play. I mean never assume anything, but I assume Platinum will outprice gold again soon.
 

Starter

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#2
Personally, I would recommend trading platinum through ETFs, using a brokerage account.

Recently, I have been using ETFs to trade silver, even though I am focusing on gold for my physical purchases. In this way, I have benefited from the recent plunge in the GSR during the last several weeks.

For platinum, there is an even stronger case to use ETFs, in that the dealers will use a bigger spread in their transactions with you, for both buying and selling, compared to silver and gold.
 

glockngold

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#3
For platinum, there is an even stronger case to use ETFs, in that the dealers will use a bigger spread in their transactions with you, for both buying and selling, compared to silver and gold.
True dat.
 

oldgaranddad

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#4
Platinum is tied primarily to the automotive industry and secondarily to the medical industry. These industries drive the demand and the price of the metal. Bad auto sales make the price dive. Secondarily, Russia had and probably still has a huge stockpile and they have occasionally dumped it onto the market for their own purposes. Other than that I too would recommend using ETFs for this investment. Then again, if it is not in your hand then it it is not yours.
 

Chester-Copperpot

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#8
I've been buying platinum Maples last year and this year. My goal is quite simple. When the GSR hits the 40's I'm trading my silver for gold. When platinum starts moving and over takes gold again, I'll trade platinum for silver. Gold never gets traded.
 

oldgaranddad

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#10
Why is the premium so high on US minted Platinum Eagles?
Because the US Mint knows that they can get it. The premium is based upon many buyers irrational belief that something familiar (US Mint products) are worth the premium over other foreign mints' products when in fact there is indeed no difference. Some buyers believe in times of trouble that US Mint made products will be easier to sell or exchange. I guess that theory is true if you deal with the under-informed, idiots or both.
 

hernancortes

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#11
Not irrational at all --- perception is reality. Their high premium is based upon them being in perpetual short supply. That they're a US coin is necessarily going to increase their demand standing against other physical options.
 

CrimsonGuardJay

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#12
Same. Platinum Eagles have a very low mintage, take the 2006 bullion strike, a total of 6,000 total mintage. The proofs are even lower and have amazing designs.
 
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oldgaranddad

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#13
Not irrational at all --- perception is reality. Their high premium is based upon them being in perpetual short supply. That they're a US coin is necessarily going to increase their demand standing against other physical options.
True but that "perception" is irrational. Other mint's that produce Platinum coinage produce the same quality with a lower premium. Why would you pay a premium for someone else's irrational fantasy that the mint of the country is that much better than a foreign mint's product? Add this kicker in too. The courts have held that all US coinage produced by its mints are the property of the US government and such the courts have left a legal loophole yet to be exploited for another twisted justification to allow another 1933 confiscation. (yes, I know this is just a llegal "what if" but in the last 10 years we have seen so many far fetched legal "what ifs" become judicial precedent). With a foreign coin the US government "supposedly" has no claims on the piece... then again with the way the SCOTUS justified Obama-Care as a tax, not a tax, insurance, not-insurance, mandate, voluntary, etc. anything is possible.
 

Chester-Copperpot

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#14
Here's the thing about platinum Eagles. When you want to sell, a local coin shop(if your lucky) will pay spot +$50. Bars maybe a hair under spot and Maples spot +$20. In order to get the full value your stuck selling on eBay. I stick to Maples and pay $80 over. Still a high premium, but it's what I favor.
 

HistoryStudent

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#15
PT is on par right behind AU and AG. The best play is ounces - close to spot as the premiums will allow.
They offer you a third way to have PMs.

Compare APEs to Canadians to Australians in any form.

I also collect APEs in proof and changing reverse APEs W in MS (2006 to 2008) because they were so low in mintage
before the gold spouses started to die.

HS
 

917601

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#16
" what is the best play?", buy physical. Speaking from experience, I have done very well buying the best I could afford, deep cameo graded proofs years ago....( from Tulving) as for " selling", mom and pop shops do not have the money to buy in quantity the graded proofs, larger recognized PM dealers who do have money ( lots of money) will...if you are in PM's to " play", you will more than likely lose.
 

ttazzman

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#17
I stacked a lot of physical PT when spot was under 1k......as a alternative long term investment.........premiums are always governed by replacement costs......as with any physical PM purchase watch the market and buy dips n sales anything to lower premium............if your just doing a short term direct metal gamble then Paper ETFs as mentioned are as good a play as any...
 

Duckworth

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#18
True but that "perception" is irrational. Other mint's that produce Platinum coinage produce the same quality with a lower premium. Why would you pay a premium for someone else's irrational fantasy that the mint of the country is that much better than a foreign mint's product? Add this kicker in too. The courts have held that all US coinage produced by its mints are the property of the US government and such the courts have left a legal loophole yet to be exploited for another twisted justification to allow another 1933 confiscation. (yes, I know this is just a llegal "what if" but in the last 10 years we have seen so many far fetched legal "what ifs" become judicial precedent). With a foreign coin the US government "supposedly" has no claims on the piece... then again with the way the SCOTUS justified Obama-Care as a tax, not a tax, insurance, not-insurance, mandate, voluntary, etc. anything is possible.
To my way of thinking this is a real concern, and makes me lean toward acquiring Canadian, Brittish etc. metals. I wouldn't put anything past this government though, and under the right set of circumstances there may be no safe havens.
 

ttazzman

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#19
a melting pot cures all those legal coinage issues real quick........its a NON ISSUE to me.....but buy metal at the very lowest premium when you can

confistication would force me to fire up the melting pot and create some gold...silver...plat....nuggets on my property to be mined when needed....
 
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hernancortes

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#23
From an 'it all melts the same' standpoint, yes it's irrational to prefer plat eagles. But I'm in the USA and it's rational to assume American's preference for APE's will persist, and their scarcity in the market will persist so the premiums will persist. After a 6 year hiatus the mint lost money on pt eagles in '14. Some have also been melted.
 
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hernancortes

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#24
The mint has lost money on pt eagles every year since they returned in 2014, 2017 being a record loss of almost 2M. The new 2017 Pd eagle also lost money at 1.3M. Net income on silver eagles dropped from over 30M in 2016 to 0.5M in 2017.
 

CrimsonGuardJay

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#25
The mint has lost money on pt eagles every year since they returned in 2014, 2017 being a record loss of almost 2M. The new 2017 Pd eagle also lost money at 1.3M. Net income on silver eagles dropped from over 30M in 2016 to 0.5M in 2017.
How exactly did it dump profit all the way from 30 mil down to a mere $500,000? Like, what the hell happened?
 

CrimsonGuardJay

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#26
Same. Platinum Eagles have a very low mintage, take the 2006 bullion strike, a total of 6,000 total mintage. The proofs are even lower and have amazing designs.
I actually may have an 06... I would love to see a crazy premium, being the scarcest bullion strike coin the mint has produced in modern day.
 

Starter

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#27
As of today, the price of platinum stands equal to that of palladium, at $919 per ounce.

This may be a critical moment for those wishing to invest in platinum.
 

ZZZZZ

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#28
As of today, the price of platinum stands equal to that of palladium, at $919 per ounce.

This may be a critical moment for those wishing to invest in platinum.
And not to mention that platinum is at an historic discount to gold.

Maybe it's just me, but I don't get it.
.
.
 

HistoryStudent

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#31
DYODD

Platinum is way undervalued.

Silver is way undervalued.

Gold is way undervalued except in 72 other countries currencies where it is close to record highs...

Remember FAMOUS TRADER Jessie Livermore said:

Do your research

Be RIGHT

Take your (huge) position

SIT DAMN TIGHT (some 25 years now)


The hardest is sitting damn tight and I hear that many are losing hope right before the stocks and bonds crash...

HS 2019
 

HistoryStudent

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#32
Check out gold prices in Mexico and Canada in their currencies...
PS they are on the border (walls) of the USA... LOL
 

HistoryStudent

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#33
Platinum is (dirt cheap) undervalued and should correct north of gold.

Palladium is (expensive compared to platinum) overvalued and should correct south of platinum.

Silver is (dirt cheap) undervalued and should correct toward around 1/30 of gold wherever gold ends up;
hopefully upward to match the 100% growth in fiat currency around the crazy globe...
 

ttazzman

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#35
The only time I've seen platinum is in jewelry pieces.
platinum is currently in pretty much every diesel engine catalytic converter and is more common in coin state by far than palladium.......over on the "bullion porn" thread i posted a picture with two sets of coins the sets both had silver/gold/platinum coins in it..point is , its out there just not near as common as gold/silver....must keep in mind its a very rare industrial metal so while it is rarer than gold it is being "used" up and some is always being lost in the industrial processes
 

HistoryStudent

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#36
PLATINUM...

My dear LORD...


If I did not have so....

What a steal...


BUY as close to spot as possible...
NO matter what form as long as recognized worldwide...
 

HistoryStudent

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#37
platinum is currently in pretty much every diesel engine catalytic converter and is more common in coin state by far than palladium.......over on the "bullion porn" thread i posted a picture with two sets of coins the sets both had silver/gold/platinum coins in it..point is , its out there just not near as common as gold/silver....must keep in mind its a very rare industrial metal so while it is rarer than gold it is being "used" up and some is always being lost in the industrial processes
YOU are so smart and helpful to the community...

You will be BLESSED honesty trust me...

You have a great heart...
 

HistoryStudent

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#38
Doug Casey and Rick Rule on South Africa and Platinum, Part II
By Doug Casey January 30, 2019
Print

Justin’s note: Today, we’re sharing part II of Crisis Investing chief analyst Nick Giambruno’s recent interview with resource legends Doug Casey and Rick Rule. If you missed part I, make sure to catch up here.

Below, the guys take a closer look at the current crisis in South Africa, and what it could mean for platinum in the near future…

Nick Giambruno: Rick, given what we’ve been discussing, do you think there’s a potential for supply disruptions soon from South Africa?

Rick Rule: I think that it is in fact a probability rather than a possibility. The industry has not made sufficient sustaining-capital investments for 10 or 12 years. The industry has been required politically – sometimes with state assistance – to keep uneconomic shafts open.

And you have a circumstance now where the lack of sustaining capital means that literally billions of dollars must be put in place to rehabilitate these old shafts so that they can continue to produce. At the same time, workers’ wages must increase.

These two circumstances are confronting an industry that loses more than a billion dollars a year.

The money has to come from somewhere, and there is nowhere for it to come from.

The second circumstance that this discussion needs to include is the fact that although South Africa has abundant resources, including human resources, the government mismanagement has been so incredible.

For example, while South Africa is an exporter of coal and uranium, the domestic power supplier in South Africa, Eskom, can’t pay its bills or meet demand for electricity.

The mining industry in South Africa is extremely power-intensive. But Eskom is run more politically. So ironically, the part of South Africa that pays its power bills – which is the mining industry – experiences rolling brownouts. Eskom needs to invest more money – money that it doesn’t have – in power generation and distribution.

This again augurs very dramatically for supply disruptions.

For example, if there were an extended brownout, it could cause the pumps for water evacuations in the deep shafts to go down for very short periods of time, I’m talking about a week or so. That would cause material destruction to the ventilation and electrification of these deep shafts. My suspicion is over two or three years, that’s a probability as opposed to a possibility, too.

Doug Casey: I agree with Rick. Because mining, especially in South Africa – where mines go a mile or even two miles deep – is both a high-technology and extremely capital-intensive business.

Today’s South Africa isn’t generating any new technology; the money is all going into politics, not science and engineering. Nobody wants to invest in a place where property rights are ceasing to exist. As Rick emphasized, nobody is going to put any significant capital in there, and they’re not generating any domestic capital.

I just don’t see how the mining industry can continue there. It’s a far cry from the 1960s when these mines were making enough money to pay, on average, 10% dividends with gold at only $35 an ounce.

Nick Giambruno: You mentioned the disregard for private property rights, Doug. It appears South Africa is about to embark on a massive private property confiscation scheme. We’ve seen this before in places like Zimbabwe, Cuba, and Venezuela. It usually coincides with economic collapse and an exodus of skilled workers. Could that happen in South Africa, and what are the implications for the mining industry in particular?

Doug Casey: It’s not just the countries you mentioned. The Soviet Union and pre-Deng China collapsed because of socialism. Now, as far as the economic future in South Africa, it’s going to be grim. Why should it be different from every other experiment in social engineering?

South Africa’s current culture doesn’t value the mainsprings of progress, which is to say free speech, free markets, individualism, a sound currency, and a work ethic, among other things. South Africa is basically a tribal society, and their values are communal. They’ve also been infected by every stupid idea that’s come down the pipe from Europe.

The black government is terminally incompetent and corrupt, and unlikely to get better. They see the mines, in particular, as cash cows to be milked to the greatest degree possible.

The whole economy of Africa is based on primary production, mining, and agriculture. South Africa has some industry, but it won’t be maintained, or kept up to date. It all doesn’t bode well for the place.

Nick Giambruno: South Africa has gone through numerous episodes of turmoil. A lot of people thought it would collapse amid bloody riots in the mid-1970s, but it didn’t. Doug, what makes this time potentially different?

Doug Casey: That’s the $64,000 question. Let me give you a few thoughts.

In those days, the whites were relatively more numerous, but South Africa has been suffering white emigration for a couple of decades now, while the black population has doubled. The whites used to control the police and the military; that absolutely ended. The only thing the whites control is the finances of the country, and the blacks resent that. So, they’re going to lose that as well.

Skilled white South Africans will continue to make the “chicken run” in accelerating numbers, if they can. I have relatives and friends in South Africa, and they’re all looking at the door. Even though the standard of living is still very high. But it’s dangerous out on the farms and becoming more dangerous. The white exodus is going to turn into a flood over the next decade.

Nick Giambruno: Rick, what’s your outlook on the price of platinum going forward?

Rick Rule: My track record in terms of price forecasting is almost unblemished by success. So, I’m old enough now at age 65 to sort of resist questions like that.

I can only say that you wouldn’t significantly reduce platinum demand even if the price were to double or triple. One of the things that I really like about the platinum business is it takes about $120 or $130 worth of platinum to make a catalytic convertor that enables the sale of a $40,000 car. That means the cost of the platinum is irrelevant in terms of the cost of the vehicle.

I love circumstances where, 1) the price of something must go up because it’s being produced at less than the cost of production and, 2) the price can go up because the utility that the commodity delivers is so spectacular relative to its unit cost. Platinum exhibits both of those characteristics.

In other words, the industry pricing is unsustainable relative to the cost to produce platinum. The utility of platinum is so extraordinary in every application that it’s used for that my belief is you have a circumstance where the price can go up and must go up. So, it will go up. I’m just unwilling to tell you how high, because I don’t know.

Nick Giambruno: Any final thoughts?

Doug Casey: Again, I agree with Rick.
 

Varmint Hunter

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#40
iGold Advisor's Platinum & Palladium Update
IMHO he outlines a very interesting play shaping up