Bet on Silver, Platinum, Copper and Palladium


"Copper, silver, platinum and palladium. . . are the global economy."

Gold prices witnessed a new record this week but have lost steam against several other metals like silver, platinum, copper and palladium. In fact, even though the world is hailing gold as the safest bet during the times of crisis, silver, platinum, copper and palladium have helped investors reap rich dividends.

Platinum, at $1,740 an ounce, is up about 50% in the last year following huge auto sales in China, India and the U.S. Copper gained 60% to $3.18 a pound over the last 52 weeks. And while silver gained 65%, palladium jumped more 140% over the last year to $542 an ounce, or about 600 bucks below its record.

Gold has commercial and industrial uses, but mostly it is a store of value, a hedge against bad things happening. On the other hand, copper, silver, platinum and palladium are so widespread and elemental in their uses that they are the global economy.

International crises always create volatility in global markets, and volatility is the harbinger of opportunities to profit from uncertainty. The true silver lining in these events has been a predictable flight of capital to precious metals and currencies perceived as safe havens from which to ride out the storm.

As stocks rise, metals follow suit. Gold has broken out of this correlation occasionally, but silver tends to have more industrial uses than gold, thereby suggesting a trending more in line with industrial stocks. Experts are now saying that metals have severed this linkage and can only move higher in the months to come. Momentum indicators for metals seem to support this logic, though stocks did rebound this week from last week's plunge.

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