NEW YORK (Commodity Online): The recently launched platinum and palladium exchange traded funds (ETFs) in the US have witnessed a huge buying and within a week’s time the ETFs have a holding of over 200,000 ounces.

This week ETFS physical platinum shares PPLT was holding 89,948 ounces of platinum, while the ETFS physical palladium shares PALL had 99,977 ounces of palladium,
according to ETF Securities’ website.

The new exchange products are expected to give US investors easier access to the industrial metals, which have already rallied on hopes of more fund-based stockpiling.

Goldman Sachs had earlier reported that gold could face competition for investors’ money following the launch of new exchange-traded funds (EFTs) that make it easy to gain exposure to platinum and palladium.

Gold EFTs may face increased competition for investor demand in 2010 from the introduction of both the platinum and palladium ETFs, Goldman said.
 
This could put downward pressure on the gold price but could have the opposite effect on platinum and palladium.

Since the launch, both metals had rallied on expectations that the ETFs would reduce the amount the metals available in the open market. An exchange-traded fund backs its shares by buying a matching amount of metals to be stored in its custodian’s vault.

However, Goldman Sachs did not believe that tightening would actually take place and as a result it forecast a gold price of $1,350 in a year’s time. It said: “Goldman Sachs economists continue to expect that the US Federal Reserve will not raise its short-term interest rate target in either 2010 or 2011, and we continue to expect that the resulting low real interest rate environment will continue to support gold prices. Consequently, we are maintaining our current gold price forecast of $1,350 on a 12-month horizon.”

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