Platinum could be the dark horse among precious metals, according to a money manager at Pacific Investment Management Co.
Nic Johnson, Pimco’s managing director and portfolio manager for commodities, says he prefers the metal over gold. Used in autocatalysts of diesel engines and jewelry, it’s near the cheapest ever relative to both bullion and palladium, after tumbling 14 percent last year.
While investors have poured into gold funds, they’ve deserted platinum, which has fallen out of favor amid shrinking demand and excess supply. The possibility the trend reverses even slightly represents a buying opportunity, Johnson said in an interview from Newport Beach, California. With $1.72 trillion under management as of September, Pimco is one of the world’s largest bond managers.
“Platinum is relatively unloved and relatively cheap compared to other precious metals,” Johnson said in an interview last week. “It would only take a rotation of a few percent of the assets in gold exchange-traded funds moving to platinum to really have a big impact on platinum supply-demand balances and prices.”
Platinum was the weakest of the four major precious metals last year as environmental concerns reduce demand for diesel-powered automobiles. By contrast, equity market turmoil and an increasingly dovish Federal Reserve have supported gold and silver, while palladium has benefited from its use in vehicles that run on gasoline.
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