The market is weathering rising uncertainty so far, as every major group of companies in the index, from banks to commodities, has climbed since the low point in April. This brings me to the Sprott Physical Platinum and Palladium Trust (SPPP), writes Carl Delfeld, editor of Cabot Explorer.
Right now, gold is on a nice run from $1,991 per ounce in mid-February 2024. It has seen a gain of 73% since then, with central bank buying a contributing factor. Gold has now replaced the euro as the second-largest component of reserves.
Gold will no doubt pull back at some point, as I’m hearing that some are buying gold bars at Costco with credit cards. But let’s talk about SPPP.
Sprott Physical Platinum and Palladium Trust (SPPP)
There is 30 times more gold in the Earth’s crust than platinum, and in the early 1970s, platinum was five times the price of gold. Now, gold is three times the price of platinum.
Platinum has major industrial applications but, as a precious metal, also works well as a store of value. Meanwhile, platinum-group metals are in a supply deficit. Analysts from the World Platinum Investment Council currently put the expected supply shortfall for 2025 at 966,000 ounces.
This is mainly due to declining production volumes in South Africa and falling recycling volumes. Demand for platinum is currently also being supported by the jewelry sector, particularly in China.
Platinum is up 38% this year, ahead of gold, and you can also purchase physical platinum at Costco using your credit card. But I prefer our Sprott ETF recommendation, in part because it gives you the added benefit of giving you additional exposure to palladium.
Recommended Action: Buy SPPP.
