Are You Missing a Great Investment Opportunity in Precious Metals?103 views 2013-07-01 03:32 Tags: Investment
It’s obvious to anyone who follows the market that the precious metalshave dropped by a significant amount this year. At this point, many new investors who have been on the sidelines and were thinking about precious metals as a possible investment opportunity are wondering if this is the right time to begin dipping their toes into the pool.
Let’s take a look at the fundamentals of one of the precious metals, platinum, to determine if there is an investment opportunity.
Ultimately, supply and demand will lead to price movement, but in the short term, many other factors come into play. For example, if investors or institutions own multiple asset classes and they begin to suffer losses, they will end up selling indiscriminately, regardless of the long-term potential.
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That’s because, at some point, everyone must have a stop-loss, and large investors can end up moving the market far beyond equilibrium.
Fundamentally, platinum appears to be headed for a deficit, as production problems in South Africa persist, cutting supply despite the stable demand.
Additionally, the rising cost of production has resulted in many mining companies involved in precious metals stopping or scaling back their operations and production, leading to lower supply levels.
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