Some peculiarities of investment in platinum.
The increased investment in platinum will continue in our 2009 according to prediction made by many experts. The matter is that the wave of securities issues linked to the metal keep on rising still. Buyers are trying to take the advantage of the price for this precious metal. In general it’s supposed to be a good alternative to gold.

However, a short - term upward trend has raised the cost of platinum more than 30% since the beginning of this year while the majority of investment instruments are still working against the weakening industrial demand for this precious metal.

The general demand is being generated by vehicle manufacturers, which buy nearly half of the world’s supply of platinum. The matter is that this metal is used in the production of car converters. The main thing is that this demand remains relatively weak this year. And at the same time the increase of purchases by the Chinese jewelry is also going down slowly. I should say that there’s such a point of view according to which the upward trend is considered to be the result of a strong investment demand. And I should add that we still rely too much on the industrial consumption especially on the car production industry. It goes without saying that this expectation is quite vulnerable and unreliable I should say.

We should also take into consideration such a fact that there’s a certain car sharing scheme now when the government motivates the owners of cars to pass their old vehicles and buy new models. This has already stopped the fall in car sales in some countries, but it is considered to be a temporary measure.

OK, that’s enough. I mean that there’s no need to continue with talking about cars and their influence on prices for platinum. Let’s travel to the South Africa. For example the South African bank Investec has got a specific point of view according to which the investment demand was the key driver of the recent rise in prices for platinum. The matter is that index funds tied to platinum rose sharply in the first quarter of the year. And I should add that 65% price reduction reached its maximum level in March 2008. Certainly this attracted new customers. In December last year the price of this white metal was lower than the price of gold for the first time since 1996. I should say that it’s traditionally considered to be a signal for traders that it’s high time to buy platinum and correspondently sell gold. In general there’s a definite demand for platinum as well as for such precious metals as palladium and silver. So even in spite of some peculiarities mentioned above you can continue with purchasing platinum as your primary asset.

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