Dump Gold, Go for Platinum

Source:

"In Japan, sales of platinum bars have tripled in the first quarter from a year earlier. . ."

Is it time for investors to dump gold and go for platinum? It seems investors are increasingly turning to platinum following a slump in prices and gold slowly losing the safe haven charm.

In Japan, sales of platinum bars have tripled in the first quarter from a year earlier as lower prices boosted demand.

Sales volumes in the three months to March 31 jumped 217% as yen-based prices for platinum bars slumped 51% to $996 an ounce on average in the first quarter from a year earlier.

However, the platinum rush may again cause a price rise and that may hamper further rise.

Demand from auto sector, which buys around half of global platinum supply for use in catalytic converters, is expected to remain weak. Another factor which helped the platinum rush is the strong Chinese jewelry demand.

Buying of platinum-backed exchange-traded funds jumped in the first quarter as the metal's 65% tumble from the all-time high it reached in March 2008 attracted fresh buying.

The price of the white metal slid below that of gold for the first time since 1996 in December, traditionally a signal for traders to buy platinum and sell bullion.

Given the similar characteristics of platinum and palladium to gold, investors can use them as a store of value.

ETF Securities' holdings of platinum-backed fund jumped 87% during the first quarter. Switzerland's Zurich Cantonal Bank's platinum ETF holdings rose 28% in the first three months of the year.

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