Platinum

A true rarity
Platinum is extremely rare, occurring at only 0.003 parts per billion (ppb) in the Earth's crust. This makes it the most precious of all precious metals - about 30 times rarer than gold. Annual platinum production is roughly 175 tons, equal to 6% of the annual production of gold. In fact, platinum is so rare that if all the platinum in the world were poured into one Olympic-size swimming pool, it would scarcely be deep enough to cover your ankles. It is so rare that the US government considers it a 'strategic metal' and banned its ownership and use in World War II for non-military purposes. At the same time, unlike gold, platinum has major industrial uses, most notably in automobile catalytic converters.


Demand
Platinum is by far the best metallic catalyst. Since the 1980s, this "noble metal" has been used in catalytic converters, which oxidize toxic carbon monoxide into carbon dioxide, and toxic hydrocarbon fractions to carbon dioxide and water. Its usage, therefore, is closely tied to automobile demand.
Needless to say, the principal market for automobile catalysts today is China, whose automobile market last year leapfrogged its U.S. counterpart to become the largest in the world, and where sales in August were running about 18% ahead of its 2009 totals. Although Chinese automobiles use less fuel than the larger U.S. cars, they use just as much catalyst. In the last year or so, Chinese manufacturers have tended to use palladium catalysts, while Europe uses platinum. But rising global auto demand and the two metals' recent convergence in price has made platinum relatively more attractive.

Investment outlook
Taking all of this into account, investment in this metal looks extremely bright, as we move into the future.  The platinum market is much smaller than either gold or silver, and platinum price moves tend to outpace those of its counterparts.  The last great precious metals bull market of 1979-1980 saw platinum soar to $1,085 per ounce while gold peaked at $875 per ounce.  With strong demand for platinum and the ever-present threat of a supply disruption, the fundamentals are extremely supportive of higher prices.  We recommend taking a position in platinum, along with our other metals to maximize the return of your precious metals portfolio.