AGORACOM Small-cap Investor Relations Blog

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Anglo American chief ‘surprised’ by palladium bull market

Neil Hume in Cape Town

• The bull market in palladium has come as a surprise to the chief executive of Anglo American, one of the world’s biggest producers of the metal.

In an interview with the Financial Times, Mark Cutifani said he had not anticipated the barnstorming performance of palladium, which has surged 75 per cent over the past year to around $2,400 an ounce.

“Am I surprised prices have risen to this degree? Yes. And the reason is I thought there would be more substitution [from carmakers] back to platinum,” he said. “It will still happen over time. I have not changed my view. What I underestimated, very clearly, was the focus on the automakers have on making sure they manage emissions.”

In March 2018 Mr Cutifani said the rapid rise in the precious metal’s price has created a “bubble” but that its value was likely to remain high for some time. At that point palladium was trading at around $1,350 an ounce. The price subsequently rose as high as $2,555 before dropping back to about $2,400 today.

Palladium is a vital ingredient in catalysts for petrol and hybrid cars that convert toxic emissions such as carbon monoxide and nitrogen oxide to carbon dioxide, water and nitrogen. Demand for the metal has increased due to tightening emission standards in the automotive industry, particularly in China, that require more of it to be used in car catalysts.

“The way I put it, the CEO of an auto company won’t get fired for spending $20 on a vehicle on a bit more palladium. What they might get fired for is not meeting their emissions targets. That’s the critical issue,” said Mr Cutifani. After nearly a decade of undersupply the market is now critically short of palladium and scrambling to find new sources of supply.

It has also sparked a crime wave with thieves in London jacking up cars to steal the catalytic converters, which are then sold to scrap metal dealers for cash. Production of palladium is constrained because it is mined as a byproduct of platinum and nickel — commodities where new projects have been few and far between.

“What people are learning is that you can’t just turn its [supply] on and off. It’s not a flick of the switch. Mines take a long time to develop. Now, are we reacting, yes . . . but it takes a bit of time.” Additional reporting by Harry Dempsey in London.

Source: https://www.ft.com/content/61e14260-4737-11ea-aeb3-955839e06441

• Eric Sprott announces that, today, 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired ownership of 14,000,000 units of New Age Metals Inc.,
• At a price of $0.05 per share for aggregate consideration of $700,000

Toronto, Ontario–(February 3, 2020) – Eric Sprott announces that, today, 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired ownership of 14,000,000 units of New Age Metals Inc., pursuant to a private placement, at a price of $0.05 per share for aggregate consideration of $700,000. Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at an exercise price of $0.10 per share for a period of two years.

Mr. Sprott now beneficially owns and controls 14,000,000 common shares and 14,000,000 common share purchase warrants of New Age Metals (representing approximately 10.2% of the outstanding shares on a non diluted basis and approximately 18.6% on a partially diluted basis). Prior to the acquisition, Mr. Sprott did not beneficially own or control any shares of New Age Metals Inc.

The units were acquired by Mr. Sprott, through 2176423 Ontario for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of New Age Metals including on the open market or through private acquisitions or sell securities of New Age Metals including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.

New Age Metals is located at Suite 101-2148 West 38th Avenue, Vancouver, BC V6M 1R9. A copy of 2176423 Ontario’s early warning report will appear on New Age Metals profile on SEDAR at www.sedar.com and may also be obtained by calling Mr. Sprott’s office (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/52058

• Closed a fully subscribed private placement of 40 million units for aggregate gross proceeds of $2-million managed by IBK Capital Corp.

February 3, 2020 – Rockport, ON, Canada – New Age Metals Inc. (the “Company”) (TSXV:NAM); (OTC:NMTLF); (FSE:P7J) has closed a fully subscribed private placement of 40 million units for aggregate gross proceeds of $2-million managed by IBK Capital Corp. Each Unit consisted of one common share and one common share purchase warrant (“Warrant”), where each Warrant entitles the holder to purchase one additional common share at a price of $0.10 per share for a period of two (2) years from the date of closing.

In connection with the closing, the Company paid fees to IBK Capital Corp. in the amount of $104,000 in cash and issued 3,300,000 broker warrants. The Company also paid fees to Mackie Research Capital Corporation in the amount of $28,000 in cash and issued 700,000 broker warrants. Each broker warrant is exercisable into a unit under the same terms as the private placement.

New Age Metals is pleased to announce that Eric Sprott, through 2176423 Ontario Ltd., has purchased $700,000 of the fully subscribed private placement. A new insider was created in connection with the financing. 2176423 Ontario Ltd. (a company beneficially owned by Eric Sprott) purchased 14,000,000 units of the Company representing approximately 18.56% of the Company’s current issued and outstanding shares on a post conversion beneficial ownership basis. Prior to his purchase, 2176423 Ontario Ltd. (Eric Sprott) did not beneficially own or control any securities of the Company. The Units were acquired for investment purposes.

Harry Barr, Chairman and Chief Executive Officer of New Age Metals, reports: “We are very pleased to have Eric Sprott as a partner of New Age Metals Inc. His record of success is quite simply unmatched.”

The gross proceeds of this financing will be used to develop the Company’s 100-per-cent owned River Valley palladium project, located 60 miles from the Sudbury metallurgical complex in Sudbury, Ontario.

All securities issued in connection with the private placement are subject to regulatory approval and are subject to a four month plus one day hold period expiring on June 4, 2020, in accordance with applicable Securities Laws.

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About NAM

New Age Metals is a junior mineral exploration and development company focused on the discovery, exploration and development of green metal projects in North America. The Company has two divisions; a Platinum Group Metals division and a Lithium/Rare Element division. The PGM division includes the 100% owned River Valley Project, one of North Americas largest undeveloped Platinum Group Metals Projects, situated 100 kilometers from Sudbury, Ontario as well as the Genesis PGM Project in Alaska. The Lithium division is the largest mineral claim holder in the Winnipeg River Pegmatite Field where the Company is exploring for hard rock lithium and various rare elements such as tantalum and rubidium. Our philosophy is to be a project generator with the objective of optioning our projects with major and junior mining companies through to production. New Age Metals is a junior resource company on the TSX Venture Exchange, trading symbol NAM, OTCQB: NMTLF; FSE: P7J with 96,843,766 shares issued to date.

Investors are invited to visit the New Age Metals website at www.newagemetals.com where they can review the company and its corporate activities. For further information any questions or comments can be directed to [email protected] or Harry Barr at [email protected] or Cody Hunt at [email protected] or call 613 659 2773.

On behalf of the Board of Directors

“Harry Barr”

Harry G. Barr, Chairman and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward Looking Statements: This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results and are based on current expectations or beliefs. For this purpose, statements of historical fact may be deemed to be forward-looking statements. In addition, forward-looking statements include statements in which the Company uses words such as “continue”, “efforts”, “expect”, “believe”, “anticipate”, “confident”, “intend”, “strategy”, “plan”, “will”, “estimate”, “project”, “goal”, “target”, “prospects”, “optimistic” or similar expressions. These statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the Company’s ability and continuation of efforts to timely and completely make available adequate current public information, additional or different regulatory and legal requirements and restrictions that may be imposed, and other factors as may be discussed in the documents filed by the Company on SEDAR (www.sedar.com), including the most recent reports that identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Investors should not place undue reliance on forward-looking statements.

Copyright (c) 2020 TheNewswire – All rights reserved.

• Engaged IBK Capital Corp. to manage a private placement financing of up to C$2,000,000 by way of units of the Company at a price of $0.05 per Unit
• Each Unit consists of one common share and one share purchase warrant, where each Warrant entitles the holder to purchase one additional common share at a price of $0.10 per share for a period of two (2) years from the date of closing.

January 23rd, 2020 – Rockport, ON, Canada – New Age Metals Inc. (TSXV:NAM); (OTC:NMTLF); (FSE:P7J) has engaged IBK Capital Corp. to manage a private placement financing of up to C$2,000,000 by way of units (“Units”) of the Company at a price of $0.05 per Unit. Each Unit consists of one common share and one share purchase warrant (“Warrant”), where each Warrant entitles the holder to purchase one additional common share at a price of $0.10 per share for a period of two (2) years from the date of closing. This financing is fully subscribed and is anticipated to close on Friday January 31, 2020.

The securities to be issued in connection with the private placement will be subject to a four-month plus one-day hold period from the date of closing in accordance with applicable Canadian Securities Laws. Completion of the private placement and any finder’s fees payable are subject to regulatory approval.

Harry Barr, Chairman and Chief Executive Officer of New Age Metals, reports: “This year’s palladium price increase to more than US$2,400 per ounce or C$3,100 highlights the potential of our River Valley PGM project as one of the largest undeveloped primary palladium projects in North America.”

Michael White, Chief Executive Officer of IBK Capital Corp., states, “We believe there will be a positive rerating of the market value of palladium exploration companies. This would reflect the increasing value of the metal in the ground due to strong palladium prices based on a lack of stable supply from South Africa. We also believe the PGM producers of the world will need to acquire ounces in the ground in favourable jurisdictions to replace and geographically diversify their PGM reserves.”

Use of Proceeds

The Company intends to use the proceeds of this private placement to complete certain recommendations from the recent PEA completed on the company’s River Valley Project; one of North America’s largest undeveloped primary Platinum Group Metals, (PGM) Projects. Additionally, proceeds will be used to build global investor awareness in NAM, and for working capital purposes.

The River Valley PGM Project is 100% owned by New Age Metals and located in the Sudbury Mining District, 100 kms away from the Sudbury Metallurgical Complex.

About NAM

New Age Metals is a junior mineral exploration and development company focused on the discovery, exploration and development of green metal projects in North America. The Company has two divisions; a Platinum Group Metals division and a Lithium/Rare Element division. The PGM division includes the 100% owned River Valley Project, one of North America’s largest undeveloped Platinum Group Metals Projects, situated 100 kilometers from Sudbury, Ontario as well as the Genesis PGM Project in Alaska. The Lithium division is the largest mineral claim holder in the Winnipeg River Pegmatite Field where the Company is exploring for hard rock lithium and various rare elements such as tantalum and rubidium. Our philosophy is to be a project generator with the objective of optioning our projects with major and junior mining companies through to production. New Age Metals is a junior resource company on the TSX Venture Exchange, trading symbol NAM, OTCQB: NMTLF; FSE: P7J with 96,843,766 shares issued to date.

Investors are invited to visit the New Age Metals website at www.newagemetals.com where they can review the company and its corporate activities. Any questions or comments can be directed to [email protected] or Harry Barr at [email protected] or Cody Hunt at [email protected] or call 613 659 2773.

On behalf of the Board of Directors

“Harry Barr”

Harry G. Barr, Chairman and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Cautionary Note Regarding Forward Looking Statements: This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results and are based on current expectations or beliefs. For this purpose, statements of historical fact may be deemed to be forward-looking statements. In addition, forward-looking statements include statements in which the Company uses words such as “continue”, “efforts”, “expect”, “believe”, “anticipate”, “confident”, “intend”, “strategy”, “plan”, “will”, “estimate”, “project”, “goal”, “target”, “prospects”, “optimistic” or similar expressions. These statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the Company’s ability and continuation of efforts to timely and completely make available adequate current public information, additional or different regulatory and legal requirements and restrictions that may be imposed, and other factors as may be discussed in the documents filed by the Company on SEDAR (www.sedar.com), including the most recent reports that identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Investors should not place undue reliance on forward-looking statements.

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Clean-car push puts palladium in the fast lane

By: Henry Sanderson and Neil Hume

• For more than a year the silvery-white metal has been more precious than gold Palladium is used in the production of hybrid cars such as Toyota’s Prius, and high prices for the precious metal have led to a rise in the theft of catalytic converters Palladium is used in the production of hybrid cars such as Toyota’s Prius, and high prices for the precious metal have led to a rise in the theft of catalytic converters

Global efforts to clean up petrol cars are driving a record surge in the precious metal palladium, which has rallied 8 per cent in the first week of the year to more than $2,000 a troy ounce. The precious metal, which is now more valuable than gold, has benefited from continued demand from the car industry for palladium-based catalytic converters on exhausts, along with limited supply from mines in South Africa and Russia. Prices for palladium have surged by about 25 per cent since the beginning of October. Demand for car catalysts has increased over the past few years due to stricter emissions regulations in Europe and plans in China to toughen standards.

Catalytic converters take toxic emissions and produce carbon dioxide, water and nitrogen. Palladium-based catalysts are also used in hybrid cars, which are powered by engines as well as batteries. Often hybrid cars require greater quantities of the metal, since the engine is required at short notice and does not have time to warm up the catalyst. The high price of palladium has led to a rise in the theft of catalytic converters from cars.

Last year Toyota, which makes the Prius hybrid car, warned drivers in the UK to take precautions to prevent theft by buying a “Catloc” device, which is fitted around the converter to stop it being cut out. Analysts at Bank of America Merrill Lynch expect carmakers to struggle to source more palladium in the next few years as global supply is set to remain flat, at about 10.2m ounces. Last year it rose to 10.5m ounces, from 9.9m.

The price of the silvery-white metal overtook gold in December 2018 for the second time, having been more expensive for a period spanning 2000 and 2001. On Thursday palladium was trading at $2108 a troy ounce, to gold’s $1546. Palladium’s price rise has boosted the stocks of South African miners, sending the FTSE/JSE African Platinum Mining index up 4 per cent already this year. Michael Widmer, an analyst at BofA, said big carmakers had begun to consider substituting palladium for other materials, such as platinum or rhodium, which are in the same family of precious metals. Rhodium prices are up by about 15 per cent this year, outpacing palladium.

“Carmakers are starting to look into substitution. It will probably take another 12 to 18 months,” Mr Widmer said. “You can get hold of palladium but you have to pay up for it.” He added: “The quicker they do the substitution, or re-jig the catalysts, the quicker the rally will ultimately come to an end.”

Source: https://www.ft.com/content/9101bd22-3233-11ea-a329-0bcf87a328f2

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Palladium – The Prospects For A Repeat Performance

• A fantastic year in 2019.
• A rally for the ages since 2016.
• A new decade poses threats to the rally.

Of the four precious metals that trade on the NYMEX and COMEX divisions of the Chicago Mercantile Exchange, palladium is the least liquid. As of December 27, the total number of open long and short positions in the gold futures market stood at 765,653 contracts, a record high representing 76.65 million ounces of the yellow metal. Silver’s open interest was at 225,753 contracts that contain a total of over 1.128 billion ounces of silver. A gold future represents 100 ounces of the metal, while a silver contract has 5,000 ounces.

In platinum, 98,042 contracts hold over 4.9 million ounces of platinum metal, as each contract is for 50 ounces. A palladium contract is for 100 ounces of the platinum group metal. As of December 27, 23,735 contracts represented 2,373,500 ounces. Markets with less liquidity when it comes to volume and open interest tend to be more volatile than those with higher degrees of liquidity. Palladium has lived up to that tendency since early 2016 as the price has been explosive on the upside. The Aberdeen Standard Physical Palladium Shares ETF product (PALL) replicates the price action in the palladium market. At the same time, the Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR) holds palladium as well as gold, silver, and platinum bullion.

A fantastic year in 2019

Palladium was, by far, the best-performing precious metal that trades on the NYMEX or COMEX exchanges in 2019. Palladium’s price action was impressive considering that as of December 27, gold, silver, and even platinum have posted double-digit percentage gains compared to their closing prices as of December 31, 2018.

Source: CQG

As the weekly chart highlights, palladium moved from $1197.50 on the final day of 2018 to $1875.40 as of December 30, a gain of 56.6%. Palladium climbed to its most recent continuous contract high of $1963 per ounce in December while the March futures contract peaked at $1974.60.

Both price momentum and relative strength indicators were in overbought territory on December 30, but the metrics came down from recent highs given the correction on Friday, December 20. On the weekly charts, palladium put in a bearish reversal during the week of December 16. On a year-on-year basis, the total number of open long and short positions in the NYMEX palladium futures market edged lower in 2019, falling from 26,773 to 23,735 contracts from the end of 2018. Meanwhile, weekly historical volatility at 23.12% was just below the midpoint of the year for the metric.

2019 was such a good year for palladium that it was the best-performing commodity that trades on US exchanges of all during the period.

A rally for the ages since 2016

The bull market in palladium kept going in 2019, but it dates back four years to the beginning of 2016.

Source: CQG

The monthly chart illustrates what has been a parabolic trend in the precious metal since it found a bottom at $451.50 in January 2016. At $1875.40, the price was over four times higher since the 2016 bottom. Over four years, every price correction has been a buying opportunity in the precious and industrial metal. The most recent decline from $1963 to $1808.80 during the week of December 16 was looking like another opportunity to purchase palladium as the price recovered quickly to around the midpoint as of December 30.

A new decade poses threats to the rally

Palladium has been nothing short of a bullish beast since early 2016. The metal that cleanses toxins from the air in gasoline-powered automobile catalytic converters has experienced significant demand growth. With tighter pollution regulations around the world, and specifically in China, the requirements for the metal continue to rise.

The vast majority of palladium output each year comes from South Africa and Russia. According to Johnson Matthey, 2019 was the eighth consecutive year of a deficit between supply and demand in the palladium market, which continues to fuel price gains.

Source: Johnson Matthey

The chart shows that in May 2019, Johnson Matthey projected an 809,000-ounce deficit. The supply shortage was likely even higher as the price of the metal rose from a low of $1256.50 in early May to over $1875 per ounce at the end of 2019. The deficit remains significant as the total annual global output of the metal is around seven million ounces or 218 metric tons, and gross demand was 11.154 million ounces. While recycled metal provided additional supplies of 3.349 million ounces, it was not nearly enough to meet the growing demand.

While fundamentals could be telling us that the $2000 per ounce level will give way in 2020, platinum is a denser metal with higher resistance to heat than palladium.

Source: Johnson Matthey

The chart shows that Johnson Matthey projected that platinum would also move into a deficit in 2019 after a surplus weighed on the price of the precious metal in 2017 and 2018. Platinum rose from under $790 in May to the $958 per ounce level on December 30.

Meanwhile, at an over $900 per ounce discount to palladium, industrial consumers could begin to substitute platinum for palladium in 2020 as the deficit looks set to continue. Any improvement in global economic conditions would likely increase demand for both platinum and palladium in 2020.

The downside risk in the palladium market has increased dramatically, given the four-fold price increase since January 2016. The bearish price action and correction on December 20 could be a sign of things to come as volatility is likely to continue to rise with the price of the metal in 2020. Sudden price spikes to the downside could become the norm, and if the deficit expands, price vacuums to the upside could follow. Trading and investing in highly volatile commodities can be like riding a psychotic horse through a burning barn. The parabolic price action in the palladium market looks set to continue into the new decade. However, the path to higher prices could be a wild ride.

PALL is the palladium ETF product

The most direct route for a risk position or investment in palladium is via the physical market for bars and coins. The deficit and limited supplies can make premiums to the market price very expensive for these products. The NYMEX palladium futures have a delivery mechanism, which guarantees smooth convergence between physical and futures prices during delivery periods.

The Aberdeen Standard Physical Palladium Shares ETF product provides an alternative to physical or futures. The most recent holdings of PALL include:

Source: Yahoo Finance

PALL has net assets of $280.49 million, trades an average of 31,912 shares each day, and charges holders a 0.60% expense ratio. As of December 30, the price of palladium was 56.6% higher in 2019.

Source: Barchart

The chart shows that PALL moved from $119.05 on December 31, 2018, to $179.82 on December 30, 2019, an increase of 51% as it marginally underperformed the price action in the continuous palladium futures contract.

GLTR has some exposure to palladium, but is diversified

For those looking for a more diversified approach to precious metals in 2020, the Aberdeen Standard Physical Precious Metals Basket Shares ETF holds physical palladium as well as gold, silver, and platinum. The most recent top holdings of GLTR include:

Source: Yahoo Finance

GLTR has net assets of $463.08 million, trades an average of 24,328 shares each day, and charges holders a 0.60% expense ratio.

Source: Barchart

GLTR closed at $63.16 at the end of 2018. At $76.13 per share on December 30, the ETF product was a bit over 20.54% higher on the year.

Palladium looks like higher prices could be on the horizon in 2020 as the metal approaches the $2000 per ounce level. However, it could be a very bumpy ride as parabolic markets can suffer brutal setbacks. A 50% rise in 2020 would put palladium over $2800 per ounce. If the price of the metal is heading there, gold, silver, and platinum are likely to experience significant gains.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

Source: https://seekingalpha.com/article/4314566-palladium-prospects-for-repeat-performance

SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.

Platinum Group Metals Shine

• An incredible year in the palladium market continues to the end.
• Platinum shows some signs of life.

By: Andrew Hecht

It could be an excellent time to start thinking about renaming the Platinum Group Metals. After all, since 2016, the price action in rhodium and palladium has left the namesake head of the group in the dust. Platinum has been a laggard. The old title as “rich man’s gold” is as inappropriate from an investment perspective today as it is from a social one.

Meanwhile, the price action in platinum in 2019 was not that bad. The platinum futures market looks like it will post a double-digit percentage gain compared to its closing price at the end of 2018. If the price action in the other members of the precious metals sector, including gold, palladium, and rhodium, are harbingers of the future for platinum, 2020 could turn out to be an exciting year for devotees of the metal that has not lived up to its reputation as a rare precious and industrial metal.

Meanwhile, the precious metals sector of the commodities market is barreling into 2020 after a bullish run in 2019. The Aberdeen Standard Physical Precious Metals Basket Shares ETF (NYSEARCA:GLTR) holds long positions in gold, silver, platinum, and palladium bullion. A diversified approach to the sector could be an excellent way to spread risk going into the new decade that is just around the corner.

Rhodium is the star

In 2016, the price of rhodium fell to a low at $575 per ounce. Rhodium is a byproduct of South African platinum output. The weakness in the platinum price, which fell to the lowest level since 2003 in 2018 when the price reached $755.70 per ounce, caused a decline in south African platinum production. Less platinum mining caused a deficit in the rhodium market, which does not trade on the futures exchange. In the physical market, the price of rhodium took off like a rocket ship.

Source: Kitco

As the chart highlights, rhodium was trading at a midpoint value of $5,840 per ounce on December 19, over ten times higher than the price in 2016. The deficit in the rhodium market could continue to push the price higher in 2020, and a test of the all-time high at just over $10,000 per ounce could be in the cards for the platinum group metal. Rhodium has been the best performing PGM over the past years. In 2019 alone, the price more than doubled, moving from below the $2,500 level at the end of 2018 to almost $6,000 per ounce on December 17.

An incredible year in the palladium market continues to the end

While rhodium is the metal with the most impressive percentage gain since the 2016 low, the price action in palladium pushed the price of the metal to a series of new all-time highs throughout 2019.

Source: CQG

The quarterly chart of nearby NYMEX palladium futures illustrates that, before 2017, the all-time peak came in 2001 at $1,090 per ounce. Palladium blew through that high like a hot knife goes through butter and has posted gains in the past seven consecutive quarters. The price was approaching the $2,000 per ounce level as of last week when it hit a high at $1,974.60 on the active month March futures contract on December 17.

The ascent of palladium is a function of the rising demand for catalytic converters for gasoline-powered automobiles. The “phase one” trade deal between the US and China could stabilize the Chinese economy lifting requirements for new cars and palladium-based catalytic converters in the world’s most populous nation. On the supply side of the fundamental equation for palladium, supplies come from South Africa and Russia. In Russia, platinum group metals are a byproduct of nickel output.

Platinum shows some signs of life

The price action in platinum has lagged rhodium and palladium over the past years, and 2019 has been no exception. However, platinum looks set to post a gain for the year that is coming to an end.

Source: CQG

The monthly chart shows that platinum closed 2018 at $788.50 and was trading around the $937 level on December 19. Platinum looks set to deliver a double-digit percentage gain as it was 18.8% higher than the 2018 closing price. However, its performance pales in comparison to the palladium and rhodium markets.

Source: CQG

The weekly chart displays that platinum has made higher lows and higher highs throughout 2019. The price range in the platinum market has been from $787.30 and $1,000.80 on the continuous futures contract. At $937 on December 19, the price of platinum around $43 above its midpoint for the year. While platinum is not breaking any records, the price action is going into 2020 in a bullish trend.

Industrial and precious metal

Platinum group metals have a myriad of industrial applications. Aside from automobile catalytic converters, the dense metals with high resistance to heat are required in oil and petrochemical refining, fiberglass manufacturing, medical devices, and a host of other applications. Of the three metals, platinum is the densest, with the highest boiling and melting point. Therefore, platinum can serve as a substitute for rhodium and palladium in industry.

Platinum also has a history as a financial asset and a store of value. Since the 1970s, platinum had mostly traded at a premium to gold as it is over ten times rarer than the yellow metal when it comes to annual output.

Source: CQG

The quarterly chart shows that platinum traded to an over $1,140 premium to gold in 2008, but it slipped to a discount in 2014 and never looked back. After falling to a low at a $600 discount to gold in 2019, platinum was still over $537 below the yellow metal on December 19.

Platinum moved almost 19% higher in 2019, gold broke out to the upside in June but slightly lagged platinum so far in 2019.

The GLTR ETF holds long positions in two of the three platinum group metals

Precious metals are going into the new decade on a bullish note after posting across the board gains in 2019. The low level of global interest rates could cause a continuation of bullish price action in 2020.

An ETF product that offers a diversified approach to a precious metals investment is the Aberdeen Standard Physical Precious Metals Basket Shares ETF. The fund summary for GLTR states:

“The investment seeks to reflect the performance of the price of physical gold, silver, platinum and palladium in the proportions held by the Trust, less the expenses of the Trust’s operations. The Shares are designed for investors who want a cost-effective and convenient way to invest in a basket of Bullion with minimal credit risk.“

Source: Yahoo Finance

The most recent top holdings of GLTR include:

Source: Yahoo Finance

GLTR has net assets of $463.08 million and trades an average of 22,754 shares each day. The ETF product charges an expense ratio of 0.60%.

Platinum continues to offer the most compelling value proposition in the precious metals sector at around the $930 per ounce level. However, the trend in all of the precious metals will enter 2020 in bullish mode.

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Source: https://seekingalpha.com/article/4313462-platinum-group-metals-shine