Investor Demand Surges for Platinum, Palladium ETFs
Source: CommodityOnline (3/22/10)
Investor demand for platinum and palladium ETFs is rising, says a report from Metals Monthly March 2010, VM Group research for Fortis Bank Nederland.
Since their tumble in early February, platinum and palladium prices have been extremely strong. From a low of $1,475/oz on February 5th, platinum gained steadily to hit $1,624/oz by March 16th, a gain of 10% and just shy of the $1,627/oz it fixed at in January.
Palladium did even better, rising from a low of $395/oz on February 5th to hit $475/oz by March 8th, 20% up from its low, and beating its January high–indeed it's the highest fix for palladium since the same $475/oz seen on June 20th, 2008.
Unlike gold and silver, investment flows remain positive into the ETFs, although the rapid pace seen in January after the launch of the US ETF has ebbed away, particularly in platinum.
As of March 12th, total platinum ETF holdings were 934,296 oz, up from 902,230 oz at the end of January. Palladium has done better, with holdings of 1,636,523 oz, as of March 12th, up from 1,493,664 oz at the end of January (with more than 100,000 oz of this coming from the US ETF). If we add to these the net long positions on the futures exchanges of Tocom and Nymex, both platinum and palladium are at a record high.
We've been relatively negative on PGMs due to our view that car sales had been artificially boosted and are beginning to decline, especially in Europe. But China's efforts to surge ahead help palladium, and Europe's diesel bounce-back will support platinum. However, a lot will depend however on the US ETFs.