Platinum Trade Resuming?

In late 2011, I alerted you to a precious metals trade that I conducted in my own personal portfolio.

On November 1, 2011, I wrote, “Something extremely unusual is happening in the platinum markets right now. And I'm about to buy a platinum ETF in my personal investment account…

Like silver, most platinum is consumed in industrial use every year. Whereas most of the world's mined gold is sitting in a vault somewhere, most of the world's mined platinum is used up. Some of it is recycled, but the net effect is that very little readily available platinum is sitting in vaults.

But as I said, something strange is happening with the platinum market.

Usually, platinum prices are higher than gold prices, for the reasons above.

But recently, it's been selling for LESS than gold.

Such an occurrence does not happen very often, and when it does, platinum usually spikes in the months following.”

In short, I bought platinum (in two tranches) when it was cheaper than gold, and I made 11% gains on this trade in about 4 months – selling only when platinum was again more expensive than gold.

Well, I didn’t expect platinum to once again fall in price – below that of gold. But it has.

And today I put in a lowball bid at $150 on the ETFS Physical Platinum Shares Fund (NYSE: PPLT).

I anticipate that I will get filled sometime in the next week or so.

And I anticipate I’ll make another 10% or more in the next few months at the very least as the situation reverts to the mean.

I know some of my subscribers were able to take advantage of this trade last time around. If you didn’t consider buying a few shares of PPLT – and simply wait until platinum is again more expensive than gold to sell.

Keep it simple – and don’t get greedy – and you’ll come out ahead of the crowd.