Is there a precious metal that may have better profit potential than gold?
*Forbes, by Halah Touryalai, October 21, 2010:
''A Russian State Secret May Push Palladium's Price To $1,000
Yesterday I wrote about a UBS analyst note that said palladium would
reach $703 by 2013, and that if certain conditions are in place the
precious metal could hit $1,000 or more.
Well, one of those conditions could be met fairly soon.
Palladium is up 38% since January. The metal is used in
automobiles, dvd players, iPods, laptops and other electronics.
More than 80% of world's palladium production comes from two countries:
the Russian Federation and South Africa.
Russia built a massive stockpile of palladium over a number of years
when the metal wasn't being used very much. Now though, the metal
is widely used in cars -- vehicle manufacturers account for half the
world's palladium consumption.
It's also found in cell phones, LCD TVs, laptops, iPods, and DVD
players.
UBS analysts say cars will be the new mobile phones in China in terms
of consumer consumption in the next 10 years. The number of
drivers in China is doubling every four years currently.
Good news for Russia, right? Not really. There's word that
the country's stockpile is dwindling to levels well below what will be
necessary to keep up with potential demand. Russian stockpiles
supplied over 10% of the world's palladium output last year.
To make matters more complicated, exact figures on the Russian
stockpile of palladium are unknown because the country keeps them a
state secret. Very convenient.
On October 8, Norilsk said that it expects the Russian stock pile to be
finished this year and that it anticipates no deliveries in 2011.
'If so, this will mark a considerable decline in palladium supply and
the market will be minus the 1 million ounces which has been the annual
norm over the past two years. Thus a sizeable deficit looms if
correct,' a UBS note says.
Further, if the stock pile does dry up, the analysts say their 2012
forecast of $700 per ounce will be too modest. The drop in
Russian supply could push the price of palladium to $1,000.
Palladium reached $602.50 per ounce in early October -- the highest
price since 2001.
'The industry is buzzing about gold and silver, but palladium, which is
part of the platinum group metals, has appreciated the most of any
precious metal this year. This often forgotten precious metal is
up an extraordinary 38 percent since January. Of all of the
precious metals, palladium is the least known but possibly has the
greatest profit potential,' says Greg Marshall president and CEO of
Global Asset Management.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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