Invest in Commodities through Platinum Futures Contracts or Mining Companies
Platinum’s unique characteristics as a highly sought-after precious metal with industrial applications make it an ideal commodity to invest in. Fortunately, you can invest in platinum in a number of ways.
Platinum futures contract
The most direct way of investing in platinum is to go through the futures markets. The Chicago Mercantile Exchange (CME) offers a platinum futures contract.
Due to platinum’s uses in industry and a store of value, it has experienced increased demand from investors; however, platinum is also a highly sensitive trading instrument and tends to react drastically to any price shocks, as was the case during the Global Financial Crisis of 2008.
Platinum can be subject to wide price swings, so it’s not for the buy-and-hold investor; taking advantage of this opportunity requires quick and tactical trading strategies. Check out the price of platinum:
The CME platinum futures contract represents 50 troy ounces of platinum and is available for trading electronically. It trades under the ticker symbol PL.
Check out a couple companies that give you direct exposure to platinum-mining activities:
Anglo-American PLC (NASDAQ: AAUK): Anglo-American is a diversified mining company that has activities in gold, silver, platinum, and other precious metals. One excellent thing about Anglo-American is that it has significant interests in South African platinum mines, the largest mines in the world. If you’re looking for an indirect exposure to South Africa’s platinum mining industry, Anglo-American does the trick.
Stillwater Mining Company (NYSE: SWC): Stillwater Mining is headquartered in Billings, Montana, and owns the rights to the Stillwater mining complex in Montana, which contains one of the largest commercially viable platinum mines in North America. This option is a good play on North American platinum-mining activities.