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This Key Precious Metals Indicator Is Screaming “Buy!”

Wednesday, January 11, 2017 17:24
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by Justin Spittler, Casey Research:

Palladium is the year’s hottest commodity.

Palladium, as you may know, is a key industrial metal. It goes into everything from dental fillings to fuel cells. But its primary use is for catalytic converters in automobiles. These devices reduce how much pollution cars and trucks emit. They account for about 75% of palladium demand.

Last week, the price of palladium surged 11%. It was the metal’s biggest weekly gain since March. Palladium is now the year’s top-performing major commodity, according to Finviz.

There’s good reason to think that palladium will keep rallying, too. As you can see in the chart below, the metal is in a clear uptrend. This is a bullish sign. It means palladium will likely keep rising.

• The fundamentals for palladium also look good…

MarketWatch reported on Friday:

Analysts at precious-metals consultancy Metals Focus said in a recent report that “automotive demand should post another record high,” driven by healthy demand in China and the U.S. Palladium is used in automobile catalytic converters.

Retail investors are also loading up on palladium. According to The Bullion Desk, retail investors have already bought more than 5,000 ounces of palladium through exchange-traded funds (ETFs) this year. This represents a serious shift in sentiment. Last month, investors liquidated 180,000 ounces of palladium through ETFs.

• Platinum has also taken off this year…

Like its cousin palladium, platinum is used extensively in catalytic converters. Unlike palladium, however, platinum also ends up in a lot of rings, necklaces, and bracelets. According to specialty chemicals company Johnson Matthey, jewelry accounts for about a third of platinum demand.

Platinum is up 8% so far this year, making it the second-best performing commodity of 2017.

• Nick Giambruno, editor of Crisis Investing, expects platinum to keep rallying…

He explained why in the latest issue of Crisis Investing:

There’s a historic anomaly in the platinum market right now.

People call platinum “the richer man’s gold.” That’s because platinum is almost always more expensive than gold. In fact, platinum prices have dipped below gold prices only a few times in the last hundred years.

Now is one of those times.

You can buy nearly one and a quarter ounces of platinum with one ounce of gold. That’s rare.

You can see in the chart below that platinum, priced in gold, is now at an all-time low.

• Nick expects platinum to return to its historical average…

There are only two ways this can happen.

One, the price of gold could fall. But Nick doesn’t see that happening. He actually thinks gold prices could skyrocket from current levels.

That means the only way for platinum prices to get back to their historical average is for them to rise even more than gold.

Nick thinks this scenario is far more likely. And to help his readers take advantage of it, he recommended a world-class platinum miner last year.

This company is raking in cash…has almost no debt…and operates in a safe jurisdiction.

And even though it’s already surged more than 12% since the start of the year, the stock is still dirt cheap.

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