The Other Precious Metal Movers

While gold gets the headlines, the other ‘lesser’ precious metals are moving onward and upward as well.

For those paying attention, gold has been surging. This is mainly cause for concern because of speculation and fact that the US dollar is weakening. It this speculative or actual? That is for the investor to decide, but the reality is that gold is continuing to gain strength. The price of an ounce has blown past $1250, then $1300. We are so tantalizing close to $1350 that those who said $1500 may not look so crazy now. However, while gold gets the headlines, the other ‘lesser’ precious metals are moving onward and upward as well.

In early 2001, palladium was over $1000 an ounce, followed by a freefall to about $150 an ounce in 2003. Since that time it has hovered around the $150 - $300 per ounce. Yet, since October of 2009 the price has moved toward $600, currently about $590 per ounce. $300 to $590 represents a 96% increase.

Palladium has risen primarily following the desire for hard assets in lieu of fiat currency. The same may (and will be) said about platinum and silver, but also due to suspicions that Russia’s stockpiles are declining and speculation that the auto sector will pick up. I have written about palladium before exploring the subject further.

Platinum is also rising. Platinum is over $1700 an ounce. This is a rise is similar to that of plladium, but may have had the attention of investors a short while ago, as platinum was cheaper than gold (November 2008). Platinum fluctuates significantly more than gold, but in 2008 the price of platinum ranged from $774 to $2,252 per oz. It currently stands just above $1700 per ounce. Looking slightly longer than palladium, since October 2008, platinum has risen from $1291 to $1720. This represents a 75% increase.

Silver is a wonder metal, a biocide and a precious metal. Dubbed the poor man’s gold, I would be very happy to have a house made of silver. Looking at the same time frame as platinum, silver began October 2008 at about $11, dropped to $8 and change and is now $22.57. Lets take silver at $10 at the beginning of 2008, this results in a raise from ~$10 to $22.57. This is a 225% increase.

Why is there such an increase in these metals (aside from gold)? Well, a softer dollar make these cheaper in other currencies, and the only thing backing the greenbacks in your wallet is the belief that the US will keep its justice system in place, continue to be the sole superpower since the end of the cold war and we will not enter a period of social rebellion/revolution from social unrest.

While China may seem to be the driver of commodities, the more they want, the more we want. Supply and demand. I will happily trade a few Franklins for some gold or silver or platinum or palladium.

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