At The Arora Report, we divide the precious metals group in seven categories. Historically, it has paid off to first identify which of the seven will be the leaders of the next cycle, and then properly time the purchases. For an in-depth look going back to 1992, please see The next generational op: gold, silver or miners?
These are our tentative rankings for the next cycle:
- Palladium
- Major gold miners
- Platinum
- Gold
- Major silver miners
- Silver
- Junior miners
In other words, palladium may turn out to be the best performer and platinum may turn out to be the third best performer.
It is instructive to compare the performances of palladium and platinum with other components of the precious metals group. A picture is worth a thousand words; the line chart compares the iShares Silver Trust SLV in cyan, the SPDR Gold TrustGLD in yellow, the ETFS Physical Palladium Shares PALL in orange, the ETFS Physical Platinum Shares PPLT in green, the Market Vectors ETF Trust Market Vectors Gold Miners GDX in grey, and the Market Vectors Junior Gold Miners ETF GDXJ in red.
In 2013, as of the writing of this column, an investment in palladium would have generated 2.36% return, and an investment in platinum would have lost 7.34%. In contrast, an investment in gold miners would have lost 41.33%, junior gold miners would have lost 45.88%, silver would have lost 28.35%, and gold would have lost 18.15%.
Going forward, the story for platinum and palladium is a classic story of supply and demand.
Platinum supply
Only about five million troy ounces of platinum are mined yearly. For reference, about 82 million ounces of gold and about 547 million ounces of silver are mined yearly….Read more at MarketWatch