Platinum+palladium Better Than Gold+silver

[Diversified]

Now that Platinum is about the same price as Gold and Palladium is down substantially too, are they a better medium-long bet than sentiment-driven Gold and prolific silver as an investment ?

My take on it:

For Platinum and Palladium:

Prices are presently very low for Pd + Pt because Catalytic converter manufacturers and industry in general have just sold their working stocks due to falling product sales.

Pd and Pt have more uses in industry, especially alternative energy industries.

Platinum is down by a factor of 2.3 from earlier 2008.

Palladium peaked at 4 times it's present price in 2000

China are switching their car industry to domestic consumption, and are promoting Palladium Jewellry.

The Russkis sold most of their Palladium stockpile over the last decade.

There is far less Pd and Pt in the ground and recyclable than Gold and Silver.

Against Gold:

Fewer industrial uses.

Sentiment driven.

Who is going to buy back all that Gold when you want to sell?

The finance sector is getting rid of most of it's Gold stash because it's going bankrupt.

(No doubt all the Gold + Silver hoarders are going to dive in in a Panic that there are alternatives to their hoarded stash but lets hear some reasoned arguments too!)

Edited December 20, 2008 by Diversified

['Bart']

Now that Platinum is about the same price as Gold and Palladium is down substantially too, are they a better medium-long bet than sentiment-driven Gold and prolific silver as an investment ?

My take on it:

For Platinum and Palladium:

Prices are presently very low for Pd + Pt because Catalytic converter manufacturers and industry in general have just sold their working stocks due to falling product sales.

Pd and Pt have more uses in industry, especially alternative energy industries.

Platinum is down by a factor of 2.3 from earlier 2008.

Palladium peaked at 4 times it's present price in 2000

China are switching their car industry to domestic consumption, and are promoting Palladium Jewellry.

The Russkis sold most of their Palladium stockpile over the last decade.

There is far less Pd and Pt in the ground and recyclable than Gold and Silver.

Against Gold:

Fewer industrial uses.

Sentiment driven.

Who is going to buy back all that Gold when you want to sell?

The finance sector is getting rid of most of it's Gold stash because it's going bankrupt.

(No doubt all the Gold + Silver hoarders are going to dive in in a Panic that there are alternatives to their hoarded stash but lets hear some reasoned arguments too!)

How would you buy them? Physical or some other method?

[Diversified]

How would you buy them? Physical or some other method?

Bullion merchants offer unallocated and allocated accounts (no VAT to pay on purchase or sale).

If you want to cash them in you can either do so into money or you can convert them to VAT-free Gold to take home.

Plus they are available in Bar and coin form.

If you buy physical you have to pay VAT from a dealer (I'm in GB) but could likely recoup most of that if you sell privately.

Alternatively if you are VAT registered, you can reclaim VAT on purchase but must charge it on sale (as customs+excise told me).

Tax treatment is the same as Silver as far as I know.

If you look at the long term charts, they look pretty attractive, particularly for those unsure about Gold+Silver.

Edited December 20, 2008 by Diversified

[azogar]

How would you buy them? Physical or some other method?

http://www.goldline.co.uk/investmentBarsPage.page

edit - prices include UK vat levies

keep it physical!!

Edited December 21, 2008 by prophet-profit

[ursamajor]

Now that Platinum is about the same price as Gold and Palladium is down substantially too, are they a better medium-long bet than sentiment-driven Gold and prolific silver as an investment ?

My take on it:

For Platinum and Palladium:

Prices are presently very low for Pd + Pt because Catalytic converter manufacturers and industry in general have just sold their working stocks due to falling product sales.

Pd and Pt have more uses in industry, especially alternative energy industries.

Platinum is down by a factor of 2.3 from earlier 2008.

Palladium peaked at 4 times it's present price in 2000

China are switching their car industry to domestic consumption, and are promoting Palladium Jewellry.

The Russkis sold most of their Palladium stockpile over the last decade.

There is far less Pd and Pt in the ground and recyclable than Gold and Silver.

Against Gold:

Fewer industrial uses.

Sentiment driven.

Who is going to buy back all that Gold when you want to sell?

The finance sector is getting rid of most of it's Gold stash because it's going bankrupt.

(No doubt all the Gold + Silver hoarders are going to dive in in a Panic that there are alternatives to their hoarded stash but lets hear some reasoned arguments too!)

It's not just other metals, gold has held up well against pretty much all commodities both soft and hard. Reinforces the view that gold is not traded primarily as a commodity but as a store of value/currency. IMO the arguments for holding gold are different from those for holding commodities.

[Diversified]

It's not just other metals, gold has held up well against pretty much all commodities both soft and hard. Reinforces the view that gold is not traded primarily as a commodity but as a store of value/currency. IMO the arguments for holding gold are different from those for holding commodities.

So what are these arguments?

Pt and Pd are both rare and precious investment metals, difference between gold is they have more practical uses and look like running out sooner.

If you are betting on widespread anarchy, gold looks best, if you are betting on either anarchy or a gradual recovery, Platinum and Palladium seem more logical because people will dump excess gold when times get dandy again whereas industry will want the Pd and Pt. Practical value of Gold is about $400, the rest is fear.

[ursamajor]

So what are these arguments?

The main one is that gold has all the qualities that make it perfect as money (rare with high value per unit weight, portable, uniform quality, divisible, durable, hard to fake etc). This was known thousands of years ago and still holds today. It is the reason that gold evolved as the predominant form of money instead of seashells or leaves or cows or anything else.

In the absence or collapse of paper money it will likely once again become the default currency.

UM

[Diversified]

The main one is that gold has all the qualities that make it perfect as money (rare with high value per unit weight, portable, uniform quality, divisible, durable, hard to fake etc). This was known thousands of years ago and still holds today. It is the reason that gold evolved as the predominant form of money instead of seashells or leaves or cows or anything else.

In the absence or collapse of paper money it will likely once again become the default currency.

UM

Platinum is actually more "precious" than gold and is also perceived so, plus it has all the qualities you describe above apart from having been so rare and difficult to work that platinum coins only started being made 150 years ago (russia).

Some interesting history of Platinum here (notably if mining stopped there is only enough above ground to last a year compared to 25years for gold):

http://www.azom.com/details.asp?ArticleID=1210

Palladium is similarly rare.

I'd say that if the poo were to hit the fan, they would be the "Gold" of today, whereas common Gold and Silver would be the loose change.

[ursamajor]

Platinum is actually more "precious" than gold and is also perceived so, plus it has all the qualities you describe above apart from having been so rare and difficult to work that platinum coins only started being made 150 years ago (russia).

Some interesting history of Platinum here (notably if mining stopped there is only enough above ground to last a year compared to 25years for gold):

http://www.azom.com/details.asp?ArticleID=1210

Palladium is similarly rare.

I'd say that if the poo were to hit the fan, they would be the "Gold" of today, whereas common Gold and Silver would be the loose change.

I agree platinum and palladium are rare, useful and valuable. But they are commodities not money. Valuable commodities that may well act as a better store of wealth than paper, but commodities nontheless. As you point out platinum is almost too rare and suffers from being harder to work than gold. But, apart from the metals' properties, the other reason it has to be gold is simply that it always has been. And in the end all forms of money are only good if they are recognised and trusted as such. And in that respect gold has heritage.

The recent moves in gold vs commodities (including pt and pd) merely confirms this distinction.

FWIW the commodity that is now absolute screaming value IMO is oil. But that's another story!

UM

[frozen_out]

Prices are presently very low for Pd + Pt because Catalytic converter manufacturers and industry in general have just sold their working stocks due to falling product sales.

I'm not sure this is true. I work for one of the major players in platinum trading (who also just happen to be one of the major players in catalytic converters) and our revenue both including and excluding direct platinum trading is up. Even accounting for currency fluctuations.

I'll have a dig around our company report for some relevant facts and figures.

[Diversified]

Well since I posted this thread, Platinum has so far done better than Gold.

[crudeFool]

Well since I posted this thread, Platinum has so far done better than Gold.

Well, that's it then - proof positive that Platinum is a better investment than gold...

crude.

[Diversified]

Well, that's it then - proof positive that Platinum is a better investment than gold...

16 year Platinum

16 year Palladium

13 year Gold

Edited December 26, 2008 by Diversified

[gallivant]

Wikipedia says this about Palladium: "Palladium plays a key role in the technology used for fuel cells, which combines hydrogen and oxygen to produce electricity, heat and water."

If you saw the Honda FCX on Top Gear recently then I think Hydrogen cars are not too far off competing with petrol cars. Getting pure Hydrogen in liquid form is a difficult and costly process at present but that could change especially when you consider how much investment car companies and governments are likely to invest in this research.

Palladium might be worth a gamble as I think it has potential to rise a lot.

[Diversified]

Platinum and Palladium are used in a variety of chemical processes, not just hydrogen, and I gather much of it isn't recoverable. Interesting stuff.

[jackpot06]

Is Platinum still cheap at the moment? Does it still represent good value?

[thod]

Is Platinum still cheap at the moment? Does it still represent good value?

You are asking for investment advice on an internet forum, that is not wise. The forum should be used to educate yourself to make your own decisions.

So is Pt cheap, yes if the price goes higher, no if it goes lower. Does it represent value, you have to define your terms.

So what are these arguments?

Pt and Pd are both rare and precious investment metals, difference between gold is they have more practical uses and look like running out sooner.

If you are betting on widespread anarchy, gold looks best, if you are betting on either anarchy or a gradual recovery, Platinum and Palladium seem more logical because people will dump excess gold when times get dandy again whereas industry will want the Pd and Pt. Practical value of Gold is about $400, the rest is fear.

To be pragmatic is to consider what 'is' and not what 'ought' to be. Your model of how the world works tells you that gold is a pretty useless yellow metal and therefore 'ought' to be low value. Yet you are faced with the fact that it is not so. That is has throughout history, in every land, in all circumstances, in war and peace, through empires, despots, and democracies, gold has retained its value.

So you have to come to the conclusion, that either every man in history, in their varied circumstances was wrong, or that it is you that is wrong. It would be the height of arrogance to assume you are the greatest mind that has ever lived. Thus the only reasonable conclusion is that there is some part of the puzzle that you are still missing. What you either don't understand, or are unwilling to accept, is the idea that gold is money. Once you accept that this is also a use, and just as valid a use as making machine parts, you may understand why it so valuable.

Neither Pt or Pd are money, they are valuable commodities, but commodities none the less. I know you want to say they are money too, but they are not. There is only one money and that is gold. You only know the price of Pt or Pd because you convert into dollars, you know how many cows or chickens that is worth too because they have dollar values. You currently quote these metals in terms of dollars. Yet all fiat currencies collapse, then you will quote them in terms of oz's of gold, there is only a place for one money and it is gold. The quantitative easing you read about is money printing. They cannot print more gold, it is why it is so loved by hard money fans. Gold is the enemy of the dollar because it competes with it and they move opposite.

Pt is only valuable because of its industrial uses. Since 70% of it goes to make cats, its price is very dependent on that. Rarity is only half of the equation, iridium is far rarer than platinum yet much cheaper. The reason being nobody has much use for it. If the companies switch to nickel in cats, then you have to expect the price to fall in the same way that fewer cars make it fall. This is the nature of commodities.

Now lets go back to some facts, since we are trying to get rid of opinions of how the world works and see whats real. Gold has no VAT, yet all the other metals do. This clearly shows that the legal systems of the various countries think that there is something different about it. If you by plat you pay VAT, so you need a rise just to get your money back.

Now back to the commodity argument. Look at how commodities have fallen. They vary but the falls are of similar magnitudes. All except gold that is, gold has barely fallen. Rhodium was over 10k an oz and is now the same price as gold. Why would this be if gold is just another commodity? Recall we are not interested in hearing about how gold 'should' have fallen too. We want to see what is real, we are interested in getting rich rather than being right. There is something special in play when it comes to gold. The money argument is that 'it'.

You may consider the 'practical' value of gold to be $400, but thats arbitrary. The vast bulk of the worlds mine production cannot produce at that price.

[Diversified]

I don't buy your argument that neither Pt or Pd are money gold is. Gold isn't money either if you claim that. It's only "money" if it's legal tender. However most things are barter material and precious metals happen to be very good for that. Now as it is, they have been doing well very recently, particularly Platinum. Looking at charts, Pt and Pd seem to have far more up potential than gold and IMO present very good value presently.

[endgame]

You are asking for investment advice on an internet forum, that is not wise. The forum should be used to educate yourself to make your own decisions.

So is Pt cheap, yes if the price goes higher, no if it goes lower. Does it represent value, you have to define your terms.

To be pragmatic is to consider what 'is' and not what 'ought' to be. Your model of how the world works tells you that gold is a pretty useless yellow metal and therefore 'ought' to be low value. Yet you are faced with the fact that it is not so. That is has throughout history, in every land, in all circumstances, in war and peace, through empires, despots, and democracies, gold has retained its value.

So you have to come to the conclusion, that either every man in history, in their varied circumstances was wrong, or that it is you that is wrong. It would be the height of arrogance to assume you are the greatest mind that has ever lived. Thus the only reasonable conclusion is that there is some part of the puzzle that you are still missing. What you either don't understand, or are unwilling to accept, is the idea that gold is money. Once you accept that this is also a use, and just as valid a use as making machine parts, you may understand why it so valuable.

Neither Pt or Pd are money, they are valuable commodities, but commodities none the less. I know you want to say they are money too, but they are not. There is only one money and that is gold. You only know the price of Pt or Pd because you convert into dollars, you know how many cows or chickens that is worth too because they have dollar values. You currently quote these metals in terms of dollars. Yet all fiat currencies collapse, then you will quote them in terms of oz's of gold, there is only a place for one money and it is gold. The quantitative easing you read about is money printing. They cannot print more gold, it is why it is so loved by hard money fans. Gold is the enemy of the dollar because it competes with it and they move opposite.

Pt is only valuable because of its industrial uses. Since 70% of it goes to make cats, its price is very dependent on that. Rarity is only half of the equation, iridium is far rarer than platinum yet much cheaper. The reason being nobody has much use for it. If the companies switch to nickel in cats, then you have to expect the price to fall in the same way that fewer cars make it fall. This is the nature of commodities.

Now lets go back to some facts, since we are trying to get rid of opinions of how the world works and see whats real. Gold has no VAT, yet all the other metals do. This clearly shows that the legal systems of the various countries think that there is something different about it. If you by plat you pay VAT, so you need a rise just to get your money back.

Now back to the commodity argument. Look at how commodities have fallen. They vary but the falls are of similar magnitudes. All except gold that is, gold has barely fallen. Rhodium was over 10k an oz and is now the same price as gold. Why would this be if gold is just another commodity? Recall we are not interested in hearing about how gold 'should' have fallen too. We want to see what is real, we are interested in getting rich rather than being right. There is something special in play when it comes to gold. The money argument is that 'it'.

You may consider the 'practical' value of gold to be $400, but thats arbitrary. The vast bulk of the worlds mine production cannot produce at that price.

A well thought out and logical explanation, thanks Thod. Humans of all nations through all time have needed a single money device. Gold has been choosen thousands of years ago and has worked perfectly ever since. Older people often understand this where younger people only have faith in the modern sysytem which is now failing. After it has failed through hyperinflation, they will see the point of gold. Unfortunatly it will be too late though.

[Diversified]

A well thought out and logical explanation, thanks Thod. Humans of all nations through all time have needed a single money device. Gold has been choosen thousands of years ago and has worked perfectly ever since. Older people often understand this where younger people only have faith in the modern sysytem which is now failing. After it has failed through hyperinflation, they will see the point of gold. Unfortunatly it will be too late though.

Ah, gold bugs trying to talk down other precious metals!

Palladium and Platinum are much rarer than gold and there is very little of them above ground. Conversly gold is so common even chavs wear it. The graphs speak for themselves and my Plat has done much better than gold since I posted this thread.

Edited January 25, 2009 by Diversified

[endgame]

Ah, gold bugs trying to talk down other precious metals!

Palladium and Platinum are much rarer than gold and there is very little of them above ground. Conversly gold is so common even chavs wear it. The graphs speak for themselves and my Plat has done much better than gold since I posted this thread.

Oh stop it! Im a precious metal bug not just a gold bug, and only since the begining of the bank crisis. Personally, I think platinum and paladium are a good buy now, but you may have to wait until the recovery of the economy and high inflation, before it goes up big time. Also its a strategic asset in times of war, which might be round the corner, and investors might be banned from hoarding it. I plan to buy some soon, hopefully cheaper than it is now in sterling. The cheapest I saw paladium was £135 an ounce at Bairds. Where did you get yours from?

[Diversified]

Oh stop it! Im a precious metal bug not just a gold bug, and only since the begining of the bank crisis. Personally, I think platinum and paladium are a good buy now, but you may have to wait until the recovery of the economy and high inflation, before it goes up big time. Also its a strategic asset in times of war, which might be round the corner, and investors might be banned from hoarding it. I plan to buy some soon, hopefully cheaper than it is now in sterling. The cheapest I saw paladium was £135 an ounce at Bairds. Where did you get yours from?

Bairds account £115. They will be opening a retail counter shortly if one wants to buy in person.

I certainly wouldn't pay attention to anything as preposterous as "being banned" from owning PMs.

In fact I'm starting to ignore petty existing "bans" on principle already.

I have also bought a property abroad, so if the penpushers in the leech occupations try to take any more liberties or lucre, I'll just close my business and shove orf, then they can damn well try fend for themselves because I don't need to put up with them.

It's totally down to you how much more you submit to, but you can be sure that if you don't draw a line to them, they'll just keep taking even more your freedom and money.

Edited January 25, 2009 by Diversified

[Old Nis]

I must come to the defence of Thod, here. He is right in that Gold is the ONLY money metal. Silver used to be so, and could one day be again, but only if attitudes to fiat money change permanently. Remember, also, that Gold is the only metal acceptable as settlement of debts between government central banks.

I am also of the view that Palladium and Platinum are (1) undervalued and (2) extremely valuable for investment purposes. So both Thod and Diversified are right, but for different reasons.

Any easily handled, desirable, easily-assayed and high-value-per-unit-weight commodity can be used for investment - even opium. But opium and other similar commodities decay too easily, and this therefore takes us back to metals. Palladium is unique, absolutely unique, in terms of its' catalytic effect and its' effect on hydrogen. Platinum is also unique as a catalyst and an inert metal of value (as jewellery). Not money, but definitely a metal of value. So these metals will almost certainly be of permanent investment value.

Almost all other metals are too hard, take too much effort to work, are radioactive or not dense or rare enough to be useful as an investment commodity. So those metals which do fit the bill can be traded as if they were like Gold. You are unlikely to care about my semantics if you buy Platinum at £680 if your stash sells at £1050. Even better if it doesn't have an emotional value to you, you'll sell when the right time comes and not hold onto it just because you like the look of it.

I wish you all the best with your investments, whether or not you call it "money". I just wish my Palladium had not been bought at the top of the market (chiz, chiz, chiz ). I suppose mine will just have to be gloated over until my heirs have suffered enough inflation to make it saleable. Can't win them all.

[endgame]

Bairds account £115. They will be opening a retail counter shortly if one wants to buy in person.

I certainly wouldn't pay attention to anything as preposterous as "being banned" from owning PMs.

In fact I'm starting to ignore petty existing "bans" on principle already.

I have also bought a property abroad, so if the penpushers in the leech occupations try to take any more liberties or lucre, I'll just close my business and shove orf, then they can damn well try fend for themselves because I don't need to put up with them.

It's totally down to you how much more you submit to, but you can be sure that if you don't draw a line to them, they'll just keep taking even more your freedom and money.

you paid £115 an ounce? Is that physical palladium in your hands or allocated in their vault? Do you think we will see lower prices than the current £170 an ounce?

Edited January 25, 2009 by endgame

[thod]

Platinum is also unique as a catalyst and an inert metal of value (as jewellery).

Any yet stories like this http://www.technologyreview.com/energy/21838/?a=f are a concern. If substitutes are found the market could dive, thats the problem with commodities. Who had ever heard of palladium 20 years ago, it was just another rare earth metal, not found outside chemistry labs. Its that single property of catalysis that worry me most. All the shouting about new vehicles at GM etc is for electric cars and they have no use for cats. Sure plat is used in fuel cells but we dont know if that tech will used and I have read recent stuff about using silver instead of plat in those.