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Largest Platinum ETF Sees Outflows as Investors Cash in Gains


The largest platinum exchange traded fund experienced its largest outflows on record after platinum prices in South African rands touched a five-and-a-half year high, with the currency dipping to a five-year low against the U.S. dollar.

The NewPlat ETF (NGPLTJ.J) saw platinum holdings diminish by 16,019 ounces to 885,206 ounces last week, the largest one-week drop since the fund first began trading last April, reports Jan Harvey for Reuters.

The NewPlat ETF, which trades on the Johannesburg Stock Exchange, provides exposure to platinum bullion price movements as tracked by the South African Rand price of platinum. The ETF is up 7.2% year-to-date.

The South African rand traded at a low of 0.0879 U.S. dollars on January 29 and has appreciated to 0.0908 USD.

Rand-denominated platinum touched a high of R16,178 an ounce in late January and has gained almost 8% year-to-date. Meanwhile, USD-denominated spot platinum has gained 1.4% so far this year.

Platinum spot price in USD is hovering around $1,405.8 per ounce. On the New York Stock Exchange, the physically backed platinum ETF, ETFS Physical Platinum Shares (PPLT) , has gained 1.1% year-to-date. [ETF Chart of the Day: All That Glitters]

“The key thing that has changed in the last couple of weeks is that the rand has blown out against the U.S. dollar,” Justin Froneman, an analyst at SBG Securities, said in the article. “The rand platinum price has gone up, and there was quite a lot of profit sitting on the table.”

South Africa is the world’s largest miner of platinum, producing about three quarters of global supply. Platinum prices have been strengthening on concerns over strikes and labor problems at South African mines. [Enthusiasm Lacking for Commodities ETFs Heading Into 2014]

For more information on platinum, visit our platinum category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.