If you have been following the stock market closely at all in recent months, you already know that in the world of commodities, metals are not doing well. This trend had already started a while back, but it has intensified lately amid threats of a trade war with China. As the “mouth of the world,” as the massive Asian country is often referred, China is among the largest consumers of raw metal ores. Should the trade war that President Trump has threatened come to fruition, prices of metals ranging from copper to zinc to gold could drop.
Why, then, is financial advisor Matt Badiali urging people to by platinum?
At first glance, the idea of investing in platinum at such a time seem preposterous. After all, the price of this precious metal recently hit a 14-year low. In 2008, the metal hit its highest price in recent memory, trading at a high of $2,308.80 per ounce. To put that into perspective, gold was only trading for $1,033.90 per ounce at the time. Shortly after hitting that high, though, everything came crashing down. By October of 2008, the price for platinum had plummeted to just $761.80 per ounce—a drop of 67 percent.
Platinum is used in a variety of ways, so its value fluctuates based on a number of factors. It is widely used in the production of diesel fuel, and it is also used to make the catalytic converters that are installed on countless vehicles. Indeed, roughly 50 percent of the platinum that is used in the world is used to produce catalytic converters. It is also used to make semi-precious jewelry, and analysts had been predicting that demand for such jewelry would rise soon. Thanks to threats of a looming trade war with China, however, that had not come to fruition.
Even though platinum prices are at a 14-year low currently, demand for the precious metal is currently much higher than the available supply. This is one of the many things that has everyday investors scratching their heads—but it makes perfect sense to someone like Matt Badiali. Badiali has a unique combination of experiences and credentials that make him particularly qualified to analyze the prices of precious metals like platinum. In a recent article, “Platinum Might Soon Be a Great Buy,” Badiali outlines exactly why it could pay enormously to start investing in this precious metal in the near future.
Since platinum prices are at rock-bottom levels right now, some analysts argue that they can only go up from here. That is indeed at least partly why Matt Badiali is urging people to consider investing in platinum again. Several factors are converging to suggest that a major price increase is on the horizon for the metal—and those who get in now stand to make the most money when that does occur. Right now, platinum is trading for below $900 per ounce. However, that means that the price has rebounded by quite a bit since dropping to a low of $793 per ounce just a few weeks ago.
Some of the factors that may precipitate a major price increase for platinum include:
- It is Rarer Than Gold – Since gold is usually more valuable than platinum, people tend to assume that it is much rarer than it too. In reality, the opposite is true—and it’s important to keep this in mind when it comes to investing, according to Badiali. On average, around 2,800 tons of gold are produced, or mined, every year; in comparison, only around 250 tons of platinum are produced. This has been the case for years, but when combined with the other factors, it could mean that a major increase in the value of platinum is just over the horizon.
- The Economy is Stable – As a general rule, the price of platinum and other strong, durable metals tends to rise during times of economic prosperity. The world economy has rebounded spectacularly from the Great Recession, and the housing market continues to do well too. During a strong economy, consumer confidence increases. In turn, demand for things like new cars goes up. Since platinum is a crucial industrial metal that is highly relied on in car manufacturing, it stands to reason that a good economy should increase demand for it—and this should make the price go up before very long.
- It Has Tons of Industrial Applications – Per ounce produced, platinum has far more industrial applications when compared to gold. This again means that when the economy is “booming,” demand for this metal should increase substantially because it can be used in so many different ways. Badiali advises investors to look into platinum groups by companies like Sibanye-Stillwater. Such firms tend to be major suppliers to industrial manufacturers, so the value of their stocks tends to rise when demand for industrial-grade metals increases.
- It is the Most Expensive Metal to Produce – Because platinum is found deep in the earth’s crust, extracting it is very expensive. It has been estimated that it costs around $1,100 per ounce to produce platinum. Given that it is currently trading for less than $900 per ounce, it is unlikely that current production levels can be sustained for much longer. At a certain point, production is going to dwindle away. When that occurs, supply will fall far short of demand, and prices will rise.
All that it will take is for at least a few of the above factors to occur simultaneously, and the price of platinum shouldn’t just rise—it should do so rapidly and significantly. People who are wise enough to invest in it now, as is being recommended by Badiali and many others, stand to make very substantial profits in the years to come.
What is it about Matt Badiali that makes him such an authority on something like the price of platinum? Unlike many who work in the financial sector, Badiali’s experience isn’t limited to finances and investing. Originally, he intended to work as a geologist, and his educational background reflects this. Indeed, Badiali started out by earning a Bachelor of Science in geology and earth sciences from Penn State University in 1992. In 2000, he earned a master’s degree in geology and earth sciences from Florida Atlantic University. He proceeded to earn his PhD in sedimentary geology from the University of North Carolina at Chapel Hill in 2005.
It was shortly after earning his PhD that Badiali was approached by a well-known investor. The investor asked him to travel the world investigating various energy companies to determine where the best investment opportunities could be found in the fields of energy, natural resources and metals. Thus began his career as a well-respected financial advisor—a role that he maintains to this day.
As the editor of Real Wealth Strategist, which is published by Banyan Hill Publishing, Badiali provides insights and advice about investment-related subjects to subscribers from around the world. These subscribers have learned that Badiali has a unique understanding of the way in which precious metal investments work, and they appreciate that he is a bona fide geologist who truly understands the subject matter.
After so many years of being among the most under-valued precious metals out there, it looks like platinum is poised to make a huge comeback. Chances are that when it happens, it will take much of the world by surprise. Those who pay attention to Matt Badiali, however, won’t be batting any eyelashes. If they heeded his advice, they will have invested in the precious metal and will be making handsome profits before very long. Badiali updates his newsletter and other outlets regularly, and they are the best sources of advice for investing in platinum and other precious metals. It will be interesting to see how his predictions pan out.