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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • Platinum Looking Even Better Today! 0 comments
    Sep 26, 2012 11:33 AM | about stocks: PPLT

    In an interview from Peter Schiff on 25-September-2012 with the CEO of Sandstorm Gold, Nolan Watson, I noticed that platinum production costs are now almost the same as the platinum price (NYSEARCA:PPLT). This is very significant as every price drop in platinum will render platinum mines nonviable for business.

    Several articles like these have popped up recently and it's almost certain that the platinum price will go up due to supply concerns. South African miners are very inefficient and their costs are rising rapidly due to inflation.

    Nolan Watson told us that the price of gold hasn't kept pace with rising inflation. This means that the gold price should already be at $2000/ounce just to be on par with the inflation as compared to 4 years ago. Basically this means that gold is now cheaper than 4 years ago if we count in inflation.

    And platinum will be even better!

    Just look at the platinum gold ratio (Chart 1). It is forming a bottom and should go higher, meaning higher prices of platinum versus gold.

    I will be long platinum for the time being.

    (click to enlarge)

    Chart 1: Platinum Gold Ratio

    Disclosure: I am long PPLT.

    Stocks: PPLT
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