Platinum, Palladium Outperforming Gold and Silver

The trend towards resource nationalism is taking a major toll on the potential supply of platinum.  Simultaneously, auto sales are rebounding to levels not seen since before the credit crisis in early 2008.  Despite these global supply concerns and increased industrial demand, platinum is still undervalued compared to gold and are below pre credit crisis highs.  This may be a short term phenomenon and over the long term PGM's may provide a great buying opportunity for astute investors.  

 

Over 90% of platinum supply originates from South Africa, Zimbabwe and Russia. Zimbabwe has recently nationalized the assets of Zimplats.  This could have a major impact on potential supply and may increase interest for advance platinum assets in geopolitically stable mining jurisdictions.  Right now, platinum may be undervalued to gold as it is 30 times more scarce and has averaged historically to be at least double the price of gold.  Many of the platinum junior equities are deeply undervalued even compared to the bargain basement junior gold miners.  

 

Disclosuer: Jeb Handwerger is a shareholder of Prophecy Platinum and the company is a sponsor on my website.