The US Mint launched its one ounce American Platinum Eagle coins on Monday and immediately doubled last week’ s total of platinum coins sales. It is the first time the US Mint has released the platinum Eagle bullion in six years and in shifting 8,500 coins in its first day highlighted what a popular addition it is to the collection of coin enthusiasts and investors.
The American Platinum Eagle is made of 99.95% purity and carries a current spot price of $1484 an ounce, although in recent weeks this has risen sharply due to the miner’s strike in South Africa.
The precious metal climbed to a six month high last week as traders worry the prolonged strike may cause problems with demands.
Miner’s in South Africa have been on strike since January 23rd demanding an increase in wages. It is estimated that mining companies have lost $7.7bn since then, but refuse to go higher than the 9% wage increase on the table. Meanwhile, the labour union refuse to accept the offer.
Potential platinum crisis
Traders have been somewhat muted to the platinum strike. There are ample stocks of the precious metal already above ground, but now talks have broken down again there is concern whether there is sufficient quantities to keep the market supplied. Platinum is used widely throughout the automotive industries.
No further talks between the two parties have been scheduled following a public spat in a meeting last Wednesday. The government mediator said the two sides need to “reflect on their respective positions” before an agreement can be reached. At present the parties are too far apart and do not appear close to reaching an agreement.
Mining companies claim they cannot offer more than a nine per cent rise due to rising costs and depressed prices, despite making more than 50% in profits than they pay in wages. Miners however, want their wages doubling to $1200. With financial losses mounting on both sides, and just two months away from general elections, President Jacob Zuma needs to intervene quickly.
Is platinum a good investment?
A year ago platinum prices were 150 per cent higher than its current price and was not considered a sound investment. Now prices have fallen to levels almost on a par with gold, there is greater interest in investing in the precious metal, particularly as there is a high demand for the metal in industry.
Platinum is a catalyst and is used on a global scale to make catalytic convertors in cars, thus in high demand. Although analysts have differing outlooks on the short-term prospects of platinum, the long-term yields for investors look promising, particularly as gold supplies are expected to be exhausted within the next 20 years.
For the latest prices on American Platinum Eagles head over to coininvest.com to check out the latest deals. With limited supplies and high demand however, investors will have to act quickly to avoid disappointment. Alternatively, the platinum Maple Leaf and a special price on the Australian platinum platypus may appeal to you.