MUMBAI (Commodity Online): With precious metals bringing in huge returns for investors in 2009, more and more people are being lured into put their money on the metals.
 
The strong show by precious metals like platinum, gold, silver and palladium in 2009 has been a major boost for investors to jump on the metals bandwagon.

Among the lot, gold was the worst performer with only 24 per cent returns in 2009.

However, platinum, palladium and silver outperformed gold over the year. Silver gave a 60 per cent return, platinum 80 per cent and palladium prices increased more than 100 percent in 2009.

According to market analysts, all these metals are in major bull markets and have a long way to go. So, this is the right time for investors to consider diversifying some of their assets into precious metals as they still have a long way to go before peaking.

Gold is going to be influenced by the further devaluing of the major currencies especially the US dollar and then by an inflationary scenario that should begin towards the end of the year.

Silver price is totally undervalued now, considering the strong demand that exceeds supply.

Once the major bullion banks have closed their massive short positions on the futures markets, silver could explode upwards, said experts. When it comes to platinum and palladium, if you combine the strong demand for automobiles in the emerging economies with the introduction of platinum and palladium exchange traded funds as well as a tightening of supplies both these metals have good up-side potential.

The new platinum and palladium exchange traded funds were introduced earlier this month in the US. In addition, there was a huge increase in demand for platinum in jewellery.

South Africa accounts for nearly 80 per cent of the world’s platinum as well as 35 per cent of the world’s palladium.
(Source: I-Net Bridge)