Doubling Down on Platinum and Palladium
The market is weathering rising uncertainty as every major group of companies in the index from banks to commodities has climbed since the low point in April, with a small number of the usual mega tech stocks leading the charge.
The World Bank announced it would lift its longstanding ban on funding nuclear power projects. The tide of sentiment is turning along with nuclear power stocks. The ban has been in place since 2013, but the last time the bank funded a nuclear power project was 1959
One trend not changing is China’s export machine and trade surplus with the world. In 2025, it is already $500 billion - 40% higher than the same period last year. China imports are down this year, but it remains a major importer at $2.6 trillion in 2024, compared America’s $3.4 trillion of imports.
Gold is on a nice run from $1,991/ounce in mid-February 2024. This is a gain of 73% since then with central bank buying a contributing factor which you can see in the chart above. Gold has now replaced the Euro as the second largest component.
To put things into perspective, the entire crypto sector has a market cap of about $3.2 trillion while gold is close to $23 trillion. And the total market cap of all the gold mining stocks is about $500 billion.
Gold will no doubt pull back at some point as I’m hearing that some are buying gold bars at Costco with credit cards. This week, the Chase Saphire credit card announced a $795 annual fee surpassing even that of the American Express Platinum Card.
This brings me to this week’s upgrade recommendation of Sprott Platinum and Palladium ETF (SPPP).
There is 30 times more gold in the Earth’s crust than platinum and in the early 70s, platinum was five times the price of gold. Now gold is three times the price of platinum.
Platinum has major industrial applications but as a precious metal also works well as a store of value.
Platinum group metals are also in is supply deficit
Analysts from the World Platinum Investment Council currently put the expected supply shortfall for 2025 at 966,000 ounces. This is mainly due to declining production volumes in South Africa and falling recycling volumes. Demand for platinum is currently also being supported by the jewelry sector, particularly in China.
Platinum is up 38% this year, ahead of gold and you can also purchase physical platinum at Costco using your credit card.
I prefer our Sprott ETF recommendation, which moves to a full position today with the added benefit of giving you additional exposure to palladium.
Increase Allocation to Sprott Platinum and Palladium ETF (SPPP) from Buy a Half to Buy a Full Position