More Pretty Sure Bets
In August I wrote a short piece called, “Pretty Sure Bets.” In it I said that buying rhodium at $1080 was a pretty sure bet. Today that same rhodium is quoted at $1325. That’s a nice $245 move.
I also pointed out that the platinum/gold spread was the highest I had ever seen it with gold carrying a $227 premium over platinum and that platinum/gold spread was a pretty sure bet. Today, platinum is quoted at $1715 and gold at $1668, so now platinum has a premium of $47 over gold. That means the spread has moved $274 in favor of platinum.
South Africa is turning into a cesspool and I think over the long term will adopt the Rhodesia/Zimbabwe model. Since South Africa produces some 80% of world production of platinum/palladium/rhodium, I believe what were pretty sure bets 6 months ago are still pretty sure bets.
If you don’t want to bet on the direction of gold, you can still buy two contracts of platinum (50 ounces each) and sell one contract of gold (100 ounces) and have a pretty sure bet on the spread.
Baird now manufactures rhodium 1-ounce bars. Rhodium was as high as $10,000 an ounce in early 2008 and $2500 an ounce as recently as April of 2011. Because of its higher melting point rhodium should be more valuable than platinum and has carried a premium to platinum most of the time. It is a lot more rare than platinum and as investors learn it is available in bar form will become more liquid.
I have a good friend in Miami who owns Gables Coin. I have been buying coins from him for the best part of 25 years. He offers both the best prices and best service I have ever had. His name is John Albright and can be reached at 1 (305) 446-0032. He can get you the one-ounce Baird Rhodium bars for $1485 in any quantity.
Everything is going to go higher but rhodium and platinum are going higher in relative terms.