Platinum

I’m basically trading platinum until it returns to mean – that is, until it’s more expensive than gold.

Considering that my thesis for gold is for it to move gradually higher, I guess I expect platinum to have the most upside from these prices – but it could also languish for a period of months below gold…

The only circumstance where I would probably avoid this current trade would be when I see a (more) substantial break down in the American economy. During that scenario, I would expect physical silver and gold to outperform – because classic precious metals are tacitly understood to outperform not during inflation/deflation or even currency crisis, necessarily – but during periods of high uncertainty and loss of faith in currency.

In that case, my paper PPLT position will be a hill of beans. For that matter, so would any of my paper positions in silver or gold.

That’s why I always stress to take delivery of physical.

For that reason, I wouldn’t suggest buying physical platinum. Most people have a decent understanding of silver and gold. But platinum basically looks like silver. It’s a little heavier than gold. No one really owns any platinum, or has seen it in person or even on TV.

If platinum were a baseball card it might be Carl Yastrzemski. People have heard of him, and he might be a better ball player than Babe Ruth and Mickey Mantle (gold and silver) but if you’re talking baseball cards, or precious metals, you want to stick with what other people know.

I’m sticking with physical gold (NYSE:GLD) and silver (NYSE:SLV) – and for the time being I’m trading platinum.