With Friday’s announcement that it has developed an emission control catalyst that could cut in half the PGM loadings for gasoline-fueled cars, Nissan Motor Company has roiled the PGMs markets. Platinum dropped $43, while palladium dropped only $4. Investors should expect more fireworks as the market evaluates the impact of Nissan’s new catalytic converter.
At CMIGS, we have not been PGMs fans because while platinum and palladium are precious metals, they are industrial metals and have not been used as money. We believe the compelling reasons for own precious metals is to protect against currency debasement, and gold and silver have proven to be the ultimate hedges against inflation.
All things being equal, platinum and palladium would protect against currency debasement, but all things are not equal because of the huge demand for the PGMs that comes from the automobile industry, for use in catalytic converters specifically. Now, the Nissan announcement makes it extremely difficult to project future demand.
Mineweb.com has an article on Nissan’s announcement, with commentary on possible future impact on platinum and palladium demand.
As an investor of gold and silver and just a little platinum, it’s kind of alarming hearing of Nissans new invention and forcing the two metals prices down but it also tells me that most new inventions do however barely get off the ground and then collapse to the ground. As all investments are risky I feel this may just be sheep in wolf’s clothing meaning, autos have been on the road for too many years requiring converters and keeping mostly platinum much to expensive.
Who’s to say Nissan isn’t attempting to grab the market and forcing down the price with a potentially fake or false product and later purchasing billions in the two metals to help in lowering the price of their cars. Just a thought but while the prices are low, I’ll be putting a few dollars in platinum, just a few, for now.
I doubt that Nissan has a plan to force the metals down. However, as I’ve commented before, late June and early July have been times to buy.