NEW YORK, April 20, 2020 /PRNewswire/ -- South Africa Platinum mines which are responsible for over 70% of the world's supply have been shut down by the Coronavirus limiting supply. Platinum is trading at a 15-year low while the spread between gold and platinum is the highest it's been in 30 years.
Platinum is currently trading at around $770 per ounce versus over $1,700 per ounce of gold. Production price of platinum is approximately $1,100 per ounce which is significantly higher than the current market price. Due to a near halt in the economy including automotive manufacturers which use 40% of the platinum supply for catalytic converters.
Ike Roberts said, "Platinum is a great way to bet on the car industry rebound without having any auto company specific default risk. In 2008 the price of platinum crashed with the banking crises and then soared the following year to over $1,600 an ounce. We foresee a similar set of circumstances during the present crisis."
With palladium prices up to $2,100 per ounce, it will likely be substituted for by platinum in automotive applications. Additionally, because gold is up significantly and is considered a safe haven, platinum, a rarer precious metal, which historically has been used as a similar safe haven, appears to be extremely undervalued.
Monumental Property Group is a family office specializing in deep value investment opportunities.
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SOURCE Monumental Property Group