Platinum as an Investment Metal

Platinum is a good alternative for investing in precious metals, despite the fact that it is not as popular an investment as gold or silver.

Platinum is used in consumer and industrial products, including jewelry and industrial production. In fact, most platinum is used by the automotive industry in the production of catalytic converters. Therefore, compared to investing in gold, platinum can serve as a bet on the rebound in the auto industry. Platinum is more volatile than gold, so, generally speaking, platinum and silver are better investments than gold during periods of economic strength, while gold is safer play during times of turmoil and uncertainty.

Because of the small size of the platinum market, it is not possible to create a physically-backed ETF. So, all three of the platinum funds are actually exchange traded notes. (The major difference is that ETNs are debt issues.)

• iPath Dow Jones-UBS Platinum Subindex Total Return ETN (PGM)
• UBS E-TRACS CMCI Long Platinum Total Return ETN (PTM)
• E-TRACS CMCI Short Platinum Excess Return ETN (PTD)

Another possible way how to gain exposure to this precious metal is to invest in platinum producers. Two of the biggest producers are Anglo Platinum (AGPPY.PK) and Impala (IMPUY.PK).