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It's Beginning!

My eBook explains why Platinum is dramatically mispriced. Today, April futures are trading at $849.3, up $15.30 on the day. June Palladium is $1544.9. Rhodium closed yesterday at $3250 per ounce. My view is that today's price bears no relationship to the equilibrium value of Platinum. Yes, I expect it to be higher by multiples. Having said that, I view the downside risk to be highly defined and limited. Recently the $823 area was tested; before that $810; and prior to that $781. By now, I dont expect Platinum to reach any of these levels again. The theme is simple but the market doesn't have the proper perspective or context to understand what is really happening here. The Palladium premium...

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Testing the Platinum Price

Today is Tuesday, March 12, 2019. Yesterday was an important test of the Platinum market, with prices down from a recent high of $879 to a low, on April 2019 futures of $810. The sell off was a classic mistake and I think an important test. At the moment April Platinum is $835, and I don't think it will see $810 again.  The market doesnt really get it. I urge you to read my eBook to explain, but briefly, the pull of Palladium is impacting Platinum. In point of fact, Platinum is a substitute for Palladium in catalytic converters, and the difference in the price of the two metals makes no sense. The drop off in diesel car demand, which...

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SBGL

I am long Sibanye-Stillwater.  This new electricity pricing scheme as authorized by NERSA will certainly not help margins. But I do expect all South African producers will be pressured and the ultimate increases in underlying metals prices will  allow mining to continue though perhaps with a focus on higher grade ore bodies.  I 

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South Africa, Electricity, PGMs & Gold

When I was a General Partner of Lazard Freres in the 1980s, we actively traded the South African US dollar bonds issued by Eskom, which at the time was the highly efficient, modern, and extremely well run and capitalized utility in South Africa, and the biggest power company in Africa.  It is remarkable what has happened to Eskom since then; now a troubled utility. Don't take those words literally... I have not been close to Eskom nor done any analysis, but am simply sharing my intuitive sense of things. YES, IT IS CRITICAL HOWEVER, SINCE TO MINE FOR PLATINUM GROUP METALS OR GOLD IN SOUTH AFRICA, IT IS NECESSARY TO HAVE ELECTRICITY. Just two days ago, NERSA, which is the...

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Platinum & Palladium

Today is Wednesday, 2/27/19. While Platinum is up to 870.9, looking at April futures, Palladium is down 36.2 to 1483.5. As a reference, Gold is also down 2.9 to 1325.5 and Silver 11.6 cents to 15.81. Historically, all of the precious metals tend to move together, but over the past many months, Palladium, given its very strong bid and supply tightness, has typically (though not always) run, whatever the market behavior of other PGMs. My thesis is that Platinum is dramatically cheap to Palladium. It doesnt take great wisdom to come to that conclusion, looking at historical pricing when Platinum has most often traded at a premium to Palladium, let alone a discount of almost 600 dollars. :-) Same can...

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