Commodities | Platinum Prices 2009

Commodities and platinum prices enjoyed a rebound last week that could be a sign of what is ahead for us in 2009. Many of the metals, including platinum, enjoyed price increases as the U.S. dollar fluctuates, and confidence in the greenback continues to fall.

Many investors are looking at platinum as a potentially great investment for 2009, as the price ratio to gold makes many think platinum is ready for a strong upward move.

What this means is two different indicators are being looked at to determine where things will go over the short and long term for platinum.

The first indicator is the demand side of the equation for platinum, the obvious industry being the auto sector, which isn't looking too good at this time in spite of the government bailouts used to shore them up.

It isn't known whether demand for platinum will be the determining factor in the price rising, even though it is very low.

One smaller but significant factor in the ratio between gold and platinum, is the rarity issue. There is about three times as much gold as platinum in the world, and that could determine some of the pricing for platinum in 2009 in relationship to gold.

Another player in the field is the strength of the U.S. dollar, which will definitely be under downward pressure for some time ahead, including 2009. All of the money promised by the variety of government bailouts ensure inflation is just a short step away, as the Federal Reserve ramps up its printing presses.

The reason this will happen is Sovereign Wealth funds and other funds are starting to move away from the dollar, as it is increasingly being looked at as an inferior currency. Foreign governments are no longer thinking of it as a place of refuge, certainty and safety.

China is already experimenting with using its currency internally as the way to exchange goods in certain wealthier provinces.

So for the long term the greenback looks bad and gold and platinum are looking pretty good. Gold will advance this year for sure, and platinum, if it moves in lock step with it, could bring solid returns for investors, whether it's moved by demand or the ratio of it to gold.

If it begins to move in the way it has historically, platinum could surge to high prices in 2009, making it a potentially great investment.

There has been a temporary lull in the commodities bull market, but that will only be for a short season of time, as demand for natural resources inevitably starts again. Platinum will mirror that move, and gold will continue to be a haven for investors looking for a place their money can be safe, as well as grow.

We need to continually monitor platinum futures and prices, now, and in the next couple of years, as it has the potential to surprise on the upside, and long term platinum should have a lot of upward movement, as the global economy eventually rebounds and demand skyrockets. Platinum has a lot of potential going forward.