Bearish U.S. dollar play : long platinum (PTM, rated BUY)

July 1, 2008

Platinum has many industrial uses, including fuel cells and catalytic converters. While U.S. consumers have no money to spend on precious metals like platinum, but consumers in Asia will. Fundamentally, however, this is simply a position to add to my long view of gold and silver. There is some debate about how much platinum ETF’s are driving price increases globally. While this may be a factor, my goal here is to use platinum as a store of wealth, in a more speculative way than gold. PTM is an exchange traded note by UBS. The European-based platinum ETFs, including those managed by ETF Securities and Switzerland’s ZCB, together own about 365,000 ounces of platinum in June 2008 as compared to about 40,000 ounces at the end of 2007. I know of no U.S. based ETF for platinum, nor any plans for one, although I would welcome one.

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