What I Need to Know to Make a Profit on Platinum

Posted by OliverPearson 0

What I Need to Know to Make a Profit on Platinum
Platinum is a precious silver-white metal and an underlying asset for binary option traders. To make money on price fluctuations of platinum, you have to know the factors impacting its price. Only in this case, you can make a precise forecast of the price movements.

Platinum is traded on the NYMEX under the ticker PL.

The price of platinum is directly impacted by supply. The Republic of South Africa accounts for around 79% of the total amount produced in the world.  This is why the world price of this precious metal depends on monthly volume produced in this country and on the volumes supplied to the world market.  According to some reports, the South African platinum ores are richer 10 times in platinum than any other ore in the world. Canadais ranked the second producer of platinum. However, this precious metal is just a by-product of copper and nickel production there. If supply from the Republic of South Africa drops, the price of platinum soars because it’s almost impossible or extremely difficult to compensate its shortage by supply from other countries.  Russia accounts for 12% and the North America for 5% of the world production.

plThe price of platinum is also impacted by demand. This precious metal is widely used in jewelry, automotive industry, and crude oil refining as a catalyst.

Automotive industry accounts for 40% of the total volume consumed per year. This metal is used in production of the devices reducing toxic effects of gasoline engine exhaust.

To project future demand for platinum in this sector is not difficult. A change in consumption may be caused by implementation of new standards by the Environmental Protection Agency.  This may include new requirements to exhaust gas and introduction of platinum substitutes. Based on the above said, a trader has to follow the EPA concerns about air pollution in Western Europe and Japan.

 

In jewelry industry, the main consumer is Japan. However, demand for platinum has been steadily growing in the South Africa countries over the last several decades. A rise in demand pushes up prices of platinum.

NYMEX-PLTo promote platinum in jewelry industry, the South Africa companies founded Platinum Guild International. As a result of its 25 year activities, demand for platinum jewelry has increased 10 times due to high-quality advertising campaigns. This means that the steps not connected with the core business of platinum mining companies, that is, platinum production, may have a significant impact on demand.  Growing demand causes an increase in prices of platinum and revenues of the platinum producing companies. This is why I advise traders to follow news releases about launching new campaigns by platinum producing companies which can influence the platinum market.

The price of platinum is also affected by competition with its substitutes, international conflicts, quotes and duties, existing or new, in the countries playing a significant role in the world’s platinum mining and consumption.  Natural disasters are an extremely negative factor.

platinumAlso, the price of platinum is significantly affected by the U.S. dollar because it’s quoted in the U.S. dollar per troy ounce. Platinum moves inversely to the U.S. dollar.  This means that depreciation of the U.S. dollar entails an increase in the prices of platinum.

Since July 2014, platinum has been falling due to the record strengthening of the U.S. dollar.  This doesn’t mean that the value of platinum is down. This means that the U.S.dollar outperforms platinum. 

Where and How to Make Money on Platinum?

The best way to make a profit on platinum is to buy a binary option on platinum from 24option.  Investment in a binary option returns a 70% profit in just 10 to 15 minutes and ensures the best terms on the stock market.

To profit on a binary option, you have to pinpoint whether the price of an underlying asset will rise or fall during a specific period, for instance, next 13 minutes. If the price moves in line with your forecast even by a pip, you make a profit.

Only few brokers offer options on platinum. One of them is 24option, the renowned and time-tested broker.

To make money on platinum, I browse the broker’s website and choose Platinum as an underlying asset. Then, I set time of expiration, the investment amount and click on the HIGH button as I expect the price to rise:

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If the price grows even by a pip, I will make a 73% profit.

After a little while I check the broker’s website and see the following result:

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I’m sure that platinum is really an interesting underlying asset as it has convenient volatility from the point of view of investments in binary options like the DAX index.

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