Trade Precious Metals

This precious metals ETF is worth a closer look

This precious metals ETF is worth a closer look
April 15
03:58 2015

Most precious metals, with the exception of silver, have struggled so far this year in U.S. dollar terms. In non-dollar terms results have been better given the rise in the dollar.

Much of this struggle is linked to the possible increase in U.S. interest rates. As interest rates rise, it puts pressure on commodity markets in general, and gold in particular.

ETF Securities is a provider that has focused closely on precious metals ETFs. These include: ETFS Silver Trust; ETFS Physical Precious Metal Basket Shares; ETFS Physical Palladium Shares, and ETFS Physical Platinum Shares. Other issues include ETFS Gold Trust and ETFS Asian Gold Trust.

The palladium vs. gold ratio has been trending consistently higher along with the S&P 500. However this ratio has been unable to extend above the September 2014 high.

ETF Securities expects palladium to continue to outperform platinum. Palladium appears to be in a better position to benefit from a pick-up in Chinese and U.S. economic growth, reflecting the two biggest global auto markets.

With supply expected to remain tight, platinum group metals markets are expected to remain in deficit in 2015.

However, demand fundamentals should continue to favor palladium over platinum.

Again, remember how important recent so-called “currency wars” have been as they apply to precious metals performance in other currencies versus the dollar. If the dollar should suddenly reverse course and decline, precious metals prices and other commodity prices overall should rise.

Source: Dave Fry

About Author

Dave Fry

Dave Fry

Dave Fry is founder and publisher of ETF Digest newsletter and has been covering U.S. and global ETFs since 2001. He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio".

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