Platinum Rocketing

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Emanance

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I bet I'm not the only stacker on SS wishing he had the foresight to diversify into a little platinum about a month ago :(.

7081_platinum.jpg

Source: Platinum in USD as of 14th September 2012 Netdania.com
 
willrocks said:
I'm only sad the higher price is resulting from the terrible violence occurring their at the moment.
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Yeah, that was some pretty crazy excessive use of force by the South African police against those miners a few weeks back. I forget sometimes the third world living conditions and pay endured by miners in the developing world are a massive factor in the artificially low prices of precious metals in general.
 
BMO research suggests rally might not be sustainable. Says loss of demand from just European car manufacturing weakness would more than match loss of supply from South Africa. Lot of speccie ETF buying.

The Platinum to Gold ratio chart however suggests strong bottom has been made at .85, and if you like the outlook for Gold, Platinum should do ok? Anyway I will be considering buying some if there really is a strong price correction based on resolution of disputes in S.A. or skepticism, or whatever. It still has an affinity to the monetary metals for mine - currency crisis ahead good for Pt as well as gold & silver.

http://www.kitco.com/reports/KitcoNews20120914AS_focus.html


platgoldsept2012.png
 
Platinum is still a buy. Look at the historical ratios.

From 1972 through 2011, the average gold to platinum ratio across those 39 years was approximately 1.36 oz. gold to 1 oz. platinum. Strong support is at an even ratio of 1:1. Platinum generally has bottomed when approximately 0.75 oz. gold buys 1 oz. of platinum. An indicator of a platinum bubble forming is when it reaches 2 times the price of gold or more. An indicator of a gold bubble forming is when it reaches 1.5 times the price of platinum or more.

In an article I wrote back in June I lay out a chart of ratios that I've been using to determine what metal to buy when. http://seekingalpha.com/article/658611-precious-metals-are-on-sale-or-are-they
 
This was up on the Perth Mint blog the other day. The emphasis is mine.

Platinum is one of the rarest elements in the Earth's crust roughly 30 times scarcer than gold.

The name platinum is derived from the Spanish term platina, which is literally translated into "little silver".

It was used by pre-Columbian Americans to produce artefacts of a white gold-platinum alloy.

But Spanish conquistadors thought it was a nuisance, being difficult to separate from gold nuggets.

In the 1920s, two platinum deposits each of around 100 kilometres in length were discovered in the Transvaal.

Today, South Africa has 80% of the world's platinum reserve.

Ten tons of ore requiring six months of mining are needed to produce a single ounce of platinum.

Platinum has been used as a catalyst since the early 19th century. These days half of world demand is for use in autocatalysts, where it destroys pollutants in vehicle exhaust fumes.

In the 1980s, rising prices prompted the introduction of a variety of bars and coins to meet demand for platinum as a physical investment product.

First and foremost an industrial metal, however, platinum prices are vulnerable during economic recession.

Also, supplies are at greater political and geological risk compared to other precious metals as production is largely restricted to a handful of mines.
 
I have no knowledge of Platinum so what I'm about to say is a simple guess.

The problem I see with Platinum, is that for that price you may as well buy Gold instead. Gold has a track record for being a safe haven and has a larger pool of buyers/sellers. I guess if you're just speculating, I'm sure there is money to be made but whats the long term potential of this metal?


Silver is unique that it's in a whole different price class of its own and is used in everything.

Perhaps Platinum is one use away from being quite useless if they find a better alternative for catalysts?

I'm only speculating but come on I'm sure at least one of my points is correct :P
 
Au-mageddon said:
rbaggio said:
Ten tons of ore requiring six months of mining are needed to produce a single ounce of platinum.
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It seems ridiculously cheap when you consider this ^^
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Seems ridiculously cheap because probably something else is meant when put into context. Doesn't mean that 6 months of mining is solely devoted to 1 oz, lol. It's poorly put though if it appears as a bullet point like that on the PM blog

Something more like this would be meant I think. The single oz would be part of a batch that goes through 5 months of refinement as well as the actual mining? And each oz represents 10 tonnes of ore - this would not count overburden to be stripped either. I've heard variations of this, but it's probably in the ball park - something like 2-3 times as much ore to create an oz of Pt compared to an oz of Gold? That's apparently one critical reason why there are so few Pt mining companies compared to gold. Why have exploratory programs targeting platinum when you have to spend so much more money mining and refining it but can only sell it for (currently) less than gold?

"4) Why does platinum cost so much more?

Platinum costs more for several reasons, but the most obvious is that it is the ultimate precious metal. It is more pure than gold. Platinum is more rare. It takes more effort to get it out of the ground and to refine it. For example, in order to extract a single ounce of platinum, about 10 tons of ore need to be mined. After that, the refining process takes a full five months. To make a single small ring of approximately 3 grams requires approximately 1 ton of raw ore. The annual worldwide production of platinum amounts to some 160 tons, compared to about 1,500 tons of gold."

http://www.bobrichardsjewelers.com/QA_plat.html#qst4
 
finicky said:
To make a single small ring of approximately 3 grams requires approximately 1 ton of raw ore.
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Good to know if the price goes south, I can always turn my 31grams of 9995 into a huge bling ass ring :D
 
Do you guys think platinum price is basically "free market" priced, or has some elements of manipulation like silver?
I think it is priced more natuarally but maybe im wrong.
Reason I ask is if it is not manipulated, it will be a very good trade in the coming days due to QE3 and the likelyhood of more mine closures and delays. There is plentiful supply at the moment but events will send it north for the time being.
 
finicky said:
Au-mageddon said:
rbaggio said:
Ten tons of ore requiring six months of mining are needed to produce a single ounce of platinum.
Click to expand...

It seems ridiculously cheap when you consider this ^^
Click to expand...

Seems ridiculously cheap because probably something else is meant when put into context. Doesn't mean that 6 months of mining is solely devoted to 1 oz, lol. It's poorly put though if it appears as a bullet point like that on the PM blog

Something more like this would be meant I think. The single oz would be part of a batch that goes through 5 months of refinement as well as the actual mining? And each oz represents 10 tonnes of ore - this would not count overburden to be stripped either. I've heard variations of this, but it's probably in the ball park - something like 2-3 times as much ore to create an oz of Pt compared to an oz of Gold? That's apparently one critical reason why there are so few Pt mining companies compared to gold. Why have exploratory programs targeting platinum when you have to spend so much more money mining and refining it but can only sell it for (currently) less than gold?
Click to expand...

Plus the fact that they probably extract a bunch of other minerals besides platinum from that ten tons of ore.
 
Au-mageddon said:
rbaggio said:
Ten tons of ore requiring six months of mining are needed to produce a single ounce of platinum.
Click to expand...

It seems ridiculously cheap when you consider this ^^
Click to expand...

Not sure about the six months of mining part (although it takes a lot of time and planning to get the ore) but most gold mines run at around 3g/t grades for processing...this is 10 tonnes of ore for 1 ounce of gold...
One of the largest gold plants in Australia, Boddington, which I was invloved with commissioning, had a head grade of 1g/t...30 tonnes of ore for 1 single ounce of gold...
 
adze67 said:
.... most gold mines run at around 3g/t grades for processing...this is 10 tonnes of ore for 1 ounce of gold...
One of the largest gold plants in Australia, Boddington, which I was invloved with commissioning, had a head grade of 1g/t...30 tonnes of ore for 1 single ounce of gold...
Click to expand...

Right adze, I have accepted uncritically that it needs an average 2-3 times as much ore to extract one oz of Pt compared to Gold because I've read it in a couple of sources. Wonder what the real picture is:

http://www.platinumgroupmetals.net/about_platinum/glossary/

"grade:
the concentration of an ore metal in a rock sample, given either as weight percent for base metals (e.g. Cu, Zn, Pb) or in grams per tonne (g/t) or ounces per short ton (oz/t) for precious or platinum group metals. A typical platinum mine in South Africa has a grade of 4-6 grams per tonne."
 
South African Power supply has to affect the output.

Read recently that Eskom had more problems (On going really) in the Platinum Basin.

I normally keep check of what's going on via their Web site, they have an update of supply a couple of times a week.

Here's a link if you are interested.

System status.

http://www.eskom.co.za/c/article/827/system-status-bulletins/


Also, type in Platinum Basin into their search engine for a feel for what's happening with supply.
 
Platinum has surpassed gold as king metal and was the most profitable metal in the past 2 months and still registered positive gains yesterday when silver and gold prices went lower.
 
And some of us would have had a lot more platinum if Perth had stuck to their official release date in January. :|

Now the 2013 Platinum Platypus isn't going to be released until Feb. :rolleyes:

Oh well, just might have to wait for the next dip, there will be plenty of platypus coins available because Perth like to hide them from would be clients. Very weird that a company like Perth can't even list them for sale on their bullion web-site along with gold and silver.

Hopefully our site sponsors will give the platinum coins a bit of exposure because Perth don't have their S...in one sock.

Fortunately Gold Stackers have Platinum :D

http://www.goldstackers.com.au/store/platinum-coins.html

Platinum_zps7a45dbe4.jpg

http://www.kitco.com/market/
 
First and foremost an industrial metal, however, platinum prices are vulnerable during economic recession.


Reading this statement it's probably worth waiting for the next big drop. It's not like the economy is that great.
 
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