• 1 day Shell Oil Trading Head Steps Down After 29 Years
  • 2 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 2 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 2 days Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 2 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 3 days Rosneft Announces Completion Of World’s Longest Well
  • 3 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 3 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 4 days Russian Hackers Target British Energy Industry
  • 4 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 5 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 5 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 6 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 8 days The Oil Rig Drilling 10 Miles Under The Sea
  • 9 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

The Precious Metal Heading For A Supply Squeeze

Africa’s mining industry has had…

Alt Text

Is Brazil The Next Big Platinum Frontier?

The geology of both the…

Money Flows Into Platinum as Demand for Gold and Silver Drops

Money Flows Into Platinum as Demand for Gold and Silver Drops

Gold investors have long-believed the mainstream is close at hand.

One of the major arguments from gold bulls over the last ten years has been that bullion prices will rise as gold becomes recognized amongst a wider range of investors as a legitimate option for protecting wealth.

This "mainstreaming" has been sped lately by a number of investment instruments allowing buyers to own physical gold without the hassle of storing the metal. Most notably, exchange-traded funds (ETFs).

ETFs have become an important force in the gold market. And now it appears they may be doing same for platinum.

2010 saw the launch of the first ETFs holding physical platinum, in both the U.S. and Japan. Giving investors an easy way to own "the other precious metal".

And investors have lately been giving these funds a lot of love. While investment flows into gold and silver ETFs have turned negative over the last few weeks, money continues to flow into platinum funds.

The result being that open interest in platinum on global exchanges is running at record highs. On Monday, open interest in NYMEX platinum jumped nearly 5% to over 38,500 contracts. Open interest has been rising steadily since the beginning of March.

Platinum Contracts

Adding up ETF holdings of platinum (running near 935,000 ounces), plus open interest on the NYMEX and TOCOM exchanges, platinum long positions are at an all-time record.

This buying has been good for platinum prices. The metal has risen 7% since late February, from US$1,500 per ounce to over $1,600.

But this is a situation that needs careful monitoring. ETFs and other mainstream investments can be a double-edged sword. It's great when investors are piling in and driving up prices. But the price can go the other way equally quickly if the winds of sentiment change and holders start selling.

One thing is certain. More ETF investing will mean more volatility. This is already showing up in the palladium market, which also saw new ETFs introduced recently.

Palladium open interest on the NYMEX spiked in late February. Then plunged 10% in early March. But over the last two weeks, buying has once again surged.

Palladium Contracts

Getting these metals in front of a wider audience has potential to create a lot of buying. Just beware of the trade going the other way.

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment
  • Anonymous on March 29 2010 said:

    Very interesting information.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News