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Platinum Is The World's Most Frustrating Precious Metal


  • A correction in the precious metals sector.
  • Gold and silver hit speed bumps.
  • Palladium and rhodium correct.
  • Platinum loves to tanks.
  • One day this metal will shock the world - PLTM is a physical ETF product.
  • Looking for more stock ideas like this one? Get them exclusively at Hecht Commodity Report. Get started today »

Platinum is a rare metal. The overwhelming bulk of annual production comes from two countries, South Africa and Russia. In South Africa, the output comes from primary production in mines that are deep in the crust of the earth. In Russia, platinum and other platinum group metals are byproducts of nickel output in the Norilsk region of Siberia.

Platinum is a hybrid like gold and silver. Its density and resistance to heat give platinum substantial industrial applications. At the same time, the metal formally "rich person's gold" has a reputation as a store of value and an investment vehicle. However, platinum has done its utmost to destroy that reputation since 2014, the year that it slipped to a discount to gold and never looked back.

Platinum underperformed other precious metals on both the upside and downside, making it the red-headed stepchild of the sector. Over recent sessions, platinum continued to take any excuse to refuse to hand believers in the value of the metal any reward. Platinum had a horrible week when risk-off hit the precious metals sector during the final week of February 2020. When gold and silver recovered on the first trading session of March, platinum posted a loss. I believe in platinum, but the metal takes every opportunity to make me look like a dope. The GraniteShares Platinum Trust (NYSEARCA:PLTM) replicates the price action in the platinum market, which was disappointing since mid-January when platinum failed at the highest price since early 2017.

A correction in the precious metals sector

The final week of February began with a sudden push higher in the precious metals arena. Gold rose to a new high of $1691.70 on the active month April futures contract on Monday, February 24. Silver briefly probed above $19 on the May contract. Platinum was still within striking distance of the $1000 level. Palladium

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This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis. The author is long platinum

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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