Gold Trends Versus Platinum and Palladium (GLD, PPLT, PALL, PLTM, PGM, PTM)

The relationship between gold and platinum has been a tenuous one.  When things got really bad in 2008 platinum lost its longstanding premium to the shiny yellow stuff.  The market is far smaller and its industrial uses and consumer uses vary.  The SPDR Gold Shares (NYSE: GLD) is the most liquid of the ETF products in the precious metals sector, however there has been an increased focus in platinum, and in palladium, ETFs now that the platinum to gold ratio is no longer as out of whack as before.

There are several ETF pruducts around the platinum and palladium trades: ETF Securities Physical Platinum Shares ETF (NYSE: PPLT), ETF Securities Physical Palladium Shares ETF (NYSE: PALL), First Trust ISE Global Platinum Index (NASDAQ: PLTM), IPath DJ-UBS Platinum TR Sub-Index ETN (NYSE: PGM) and UBS E-TRACS Long Platinum TR ETN (NYSE: PTM).  Morningstar has outlined the key differences here in detail on these and it is a must read for those looking at ETF and ETN products around commodities.

Our technical analysis affiliate is Adam Hewison of INO, and he has a new audio-video out looking at the current gold breakout.  He outlines why he think that gold trends all point to challenging the 2010 highs in the shiny yellow stuff.

The big risk here is that platinum could be much more susceptible to influences from investment demand over industrial demand.  Morningstart notes, “First, all the platinum ever mined would not fill up a modestly sized basement. There is nearly 17 times more gold mined per year than platinum, and most of that is put back underground again after it is refined.”

The gold trade looks back on.  The risk trade versus the defensive trade is still a fight with an unfinished outcome right now.  Stay tuned.

JON C. OGG