Platinum briefly nicks $1,000 an ounce for the first time since October. Copper this week breaks a half-year losing streak with verve. Lead and nickel in the past 30 days gain 20% and 40%, respectively. Even palladium powers up, albeit from a low base. What is this, 2007 all over again?
No, it is not. But the plastic spoon in everyone’s mouth is catalyzing and becoming lustrous again. Caveats about many rebounding commodities abound. This is a new year, and the financial world's major commodity indexes, one from Dow Jones and the other from S&P, rebalance for the start of it (2009).
Copper, whose price is enjoying a one-month high, might be influenced by producers, including Mitsubishi and Alcoa, who hint they soon will slash output. Of all the metals, precious and base, it is platinum whose recent gain, along the line of 16% in less than two weeks, looks like it might last. The metal again was flirting with $1k Thursday morning. Platinum enjoys tri-part status as an industrial (cars), financial (coins) and fashion (jewelry) commodity. For a split second late in 2008, gold was selling for more than platinum—a rare occurrence. With platinum at $980 an ounce and now $150 more expensive than gold, investors wonder whether Pt will widen the gap between lagging Au. Yes it will, eventually. Snob appeal will do the trick.
If I am correct, platinum, which is rarer than gold, will become mania-driven in coming years as financial investors acquire sticky alternatives to currency-based instruments. Mining snafus and cutbacks in South Africa, Russia and Canada will inject more mania into the Pt equation. Mostly, platinum will regain its old snob appeal.
I think, in the next several years, both gold and platinum will rise sharply in price, with or without an economic boom. Platinum, though, will become what French king Louis XV (18th century) called the only metal fit for royalty. Platinum will gain huge snob appeal in a world gone sticky for all metals.