Investors worried over gold, platinum & silver ETFs?

January 29, 2009

Commodity Online
NEW DELHI: Even though the world is gung-ho over the gold demand and rising bullion prices, there are sceptics who doubt the potential of gold, silver and platinum in the coming days.

According to experts, several investors will move away from exchange traded fund (ETF) in gold, silver and platinum.

If you check the markets, gold has slipped under the $900 per ounce mark, giving up some gains, and easing risk aversion.

However, all analysts are certain about one thing, the recent financial crisis in United States has helped lift gold up to new highs, spurring more safe-haven investors to invest in the precious metal. But at the same time there was a crash in gold jewellery buying.

Market watchers said gold will remain as an investor portfolio staple, but prices of industrial precious metals, including platinum, palladium and silver, are expected to drop further as recession and tumbling consumer and corporate confidence hits demand.

Gold is expected to climb in 2009, with prices at an average of $800 an ounce. The financial turmoil should keep the gold demand strong.

In case of platinum, the scene is very bad. Platinum miners in South Africa are planning to cut back on production, as the global slowdown has left the companies in the lurch.

Platinum has dropped 58% since March, causing many mining companies to scale back on expenses, beginning with job cuts. Experts said outlook for platinum, and the miners, are dim.

Platinum sales are off sharply over falling demand from carmakers, who account for half of global consumption.

Silver prices have also declined, sinking to $12.04 an ounce. Analysts said silver prices will fare better than those of platinum and palladium, as silver has more safe haven appeal.

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