World Economy

Move over gold and silver — it’s time for platinum to start getting the attention it deserves as a precious metal.

Year to date, gold prices have scored a climb of 14% and silver’s gained 29%. Platinum prices, however, trade just 1% higher, so while gold and silver have proven their worth as stores of value in these uncertain economic times, platinum has been left in the dust.

Reuters

That’s not so tough to make sense of, knowing that investors view gold as a monetary asset and platinum is most well known as an industrial metal. Read about gold’s investment risks.

But “all three metals have a history of money,” said Nick Barisheff, president and chief executive officer of Bullion Management Group Inc. “While gold and silver have been used as money for thousands of years, platinum too has served as an economic store of value for over 300 years.”

Platinum is also worth more than gold and it’s tougher to produce.

At $1,792 an ounce, platinum PL1V -0.52% is worth nearly $200 more than goldGC1Z +0.64% at $1,616 an ounce and it costs 45 times more than silver SI1U +0.45% at $40.

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It takes about 10 tons of ore requiring six months of mining to produce a single ounce of platinum, according to Barisheff, who points out that platinum is 30 times rarer than gold. Since 1997, demand for the metal has exceeded mine production and global demand has continued to record highs in 2011.

“Platinum is the rarest of the precious metals and its price reflects this,” said Barisheff.

The metal also offers investors the opportunity to diversify their precious metals holdings.

“The precious metal component of a properly diversified portfolio should include an allocation to platinum,” said Mark O’Byrne, executive director at international bullion dealer GoldCore. “Full diversification within the precious metal group is important in order to reduce volatility.”

Besides, “the only asset class that is better than gold as an inflation hedge is a basket that includes silver and platinum,” he said, adding that platinum may even be a better inflation indicator than oil.

And given the scale of currency debasement being seen in the U.S. and globally, platinum’s inflation-adjusted high of about $3,000 an ounce should be reached in the coming years, he said.

Unpopular precious metal

Even so, platinum hasn’t been winning any popularity contests in the precious metals sector lately — at least not as a monetary asset — for lots of good reasons.

James Turk, founder and chairman of GoldMoney, said that of the $1.8 billion of gold, silver, platinum and national currencies held by GoldMoney’s customers, only $15 million is platinum.

“So platinum is not popular,” but it’s also not neglected, he said. “Rather, it is just not liquid nor is the market as deep as gold or silver …. The big hedge funds and other institutions rarely buy platinum because the market is so thin,” said Turk.

And given that it’s a thinly-traded market, it is also the most volatile of the precious metals, said James Carrillo, account executive at precious metals investment firm Swiss America Trading Corporation.

Platinum’s industrial ties can also feed erratic moves.

More unemployed managers and executives are deciding to pack their bags and move for a new position, according to a report released this week by Challenger, Gray & Christmas.

During the first half of the year, about 9.4% of job seekers relocated for a job, up from 7.6% within the same window of time in 2010, according to the outplacement consultancy firm. That’s from a survey of about 3,000 job seekers; many of the respondents are managers and executives.

“The 9.4% relocation rate in the first half of 2011 is still low by historical standards, but the increase does indicate that job seekers are finally beginning to loosen the stakes that have kept them tethered to a specific region,” said John A. Challenger, chief executive of Challenger, Gray & Christmas, in a news release.

“Since there has been little improvement in the housing market in 2011, one might conclude that the increased relocation in the first half of the year is due to the fact that prolonged unemployment is compelling more job seekers to relocate, despite the challenges of selling a home in this market,” Challenger said.

“At some point, the job seeker may simply conclude that it is worth taking a loss on a home sale to get back on the payroll,” he said. It’s also possible that employers are becoming more willing to help employees relocate.

Before the recession it was more common for people move for a job, according to the report. About 16.1% of people who found jobs each quarter between the first quarter of 2005 and the third quarter of 2007 relocated for the position. But at that time, selling a house wasn’t nearly as difficult as it is in today’s climate.

Read more real-estate news in this week’s pages, including why the foreclosure rate is on the rise in Seattle and a Realty Q&A about one reader’s struggle with his lender.

Employment markets in some parts of the country are recovering faster than others, and in a job search, “when you cast a wider net, you are more likely to catch more fish,” Challenger said.

But these days, if you’re a homeowner, casting a wider net often means you also have to be OK with taking a loss on the sale of your home.

A new government report on the nation’s output showed the economy in much weaker shape than anticipated, casting doubt on the strength of the expected recovery in the final six months of the year.

Gross domestic product expanded at a paltry 1.3% annual rate in the second quarter, the Commerce Department said Friday, below the 1.6% growth rate that economists anticipated. See MarketWatch economic calendar.

But it was a drastic downward revision to first-quarter GDP growth that stole the show — and set economists on edge.

The new data on the inflation- and seasonally-adjusted value of all goods and services produced in the United States showed the economy barely grew at all in the January-through-March quarter, rising just 0.4% as opposed to the initially reported 1.9% improvement. At the same time, the government said the recession proved to be deeper than initially projected.See related story about the depth of the ‘Great Recession’.

Mark Vitner, senior economist at Wells Fargo, called the GDP report a “game-changer.”

Congress might have to temper its zeal to slash government spending as part of any increase in the debt ceiling, he said.

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“It does raise some legitimate questions how quickly we can rein in government spending without doing more harm than good,” Vitner said.

Stocks stayed in negative territory Friday but rose off their session lows. The Dow Jones Industrial Average was recently down 57 points to 12,183. The DJIA has lost about 4% for the week, the largest decline in about a year.

In the bond market, Treasury prices10_YEAR -3.97% extended gains, pushing 10-year note yields under 2.90%.

And in currencies, the dollar DXY -0.42% felt pressure in the face of buying in the Japanese yen and the Swiss franc. Read more on debt fears weighing on the dollar and the euro.

source----marketwatch.com U.S. stocks fell sharply on Wednesday as the political sparring over the nation’s debt limit continued and after the government reported orders for durable goods fell in June.

“The disappointing data add to the theme of a slowing global economy, which has been somewhat forgotten by some, with the markets’ focus on European and U.S. debt concerns,” Peter Boockvar, equity strategist at Miller Tabak, wrote in an emailed note.

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Extending losses into a fourth session, the Dow Jones Industrial Average DJIA -1.35% declined 106.68 points, or 0.9%, to 12,394.62, with all but two of its 30 components sliding.

The Standard & Poor’s 500 IndexSPX -1.79% shed 15.95 points, or 1.2%, to 1,315.99, with industrials the heaviest weight of the index’s 10 industry groups and telecommunications the sole sector on the rise.

Helping fuel worries about industrials firms, conglomerate Emerson Electric Co.EMR -6.85% warned on Wednesday of slowing economies in the U.S. and in Europe.

Juniper Networks Inc.’s JNPR -21.01% shares fell 20% a day after it warned its second-quarter results would fall below expectations.

Investors did embrace the market debut of Dunkin’ Brands Group Inc. DNKN +43.74% , with shares of the initial public offering rising 44% to $27.40 a piece.

The Nasdaq Composite Index COMP -2.40% fell 49.15 points, or 1.7%, to 2,790.81.

Treasury prices fell as traders readied for the government’s auction of $35 billion in five-year notes in the afternoon, with yields on the benchmark 10-year Treasury note 10_YEAR +1.12% rising to 2.966%.

Gold futures GC1Z -0.20% were lately off 50 cents at $1,618.80 an ounce, after rising to a record high of $1,1631.20 an ounce in New York, while crude-oil futures CL1U -2.26% slid $1.48 to $98.11 a barrel after government data showed a rise in inventory last week.

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For every stock on the rise three fell on the New York Stock Exchange, where 399 million shares traded as of 12:15 p.m. Eastern.

The Commerce Department on Wednesday said orders for U.S. durable goods unexpectedly dropped in June.Read full story on decline .

Wall Street’s nerves were further frayed as the deadlock over raising the debt limit showed few signs of abating in Washington, with a House vote on Speaker John Boehner’s plan to raise the debt ceiling and trim the deficit delayed at least a day.

Adding further fodder to the debate, the Congressional Budget Office said Senate Majority leader Harry Reid’s deficit-reduction plan would cut projected deficits by $2.2 trillion over 10 years, $500 billion less than the $2.7 trillion in future cuts estimated by the Nevada Democrat.

The CBO found a competing plan sponsored by Ohio Republican Boehner would cut the deficit by $850 billion over 10 years, $350 billion short of the $1.1 trillion he projected.See more of the CBO’s analysis .