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Should You Be Investing in Platinum Instead of Gold?

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    Midas Funds’ Tom Winmill on the expected increase in demand for platinum.

  • Duration 4:34
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Prices rallying nearly three and a half percent today a big day for gold but we've got someone who says there's another metal that you should be watching.

Tom windmill is the portfolio manager -- -- in my despondent he joins us right now.

What's quite -- what the answer that question what should we be looking at if not gold.

Let's take a look at platinum platinum is a roundup 14145.

Dollars an ounce right now I'm the cost of producing an ounce of -- about -- 18100 dollars an ounce.

It's a very capital intensive.

-- -- to pretty steep out of the ground most of the comes from South Africa and those that has seen some problems they have.

Electricity generation -- -- can't generate -- next enough electricity to run their -- so there's a shortage we believe a platinum in the market now we know that.

GDP in the first half United States was largely.

Up because of the increase in car sales and that's reflected it's reflected generally improving economy with more economic recovery -- -- a lot more demand for -- Okay but Tom let's go back to gold that everybody wants to know about holding you would not only are bullish but you think that there is one company in particular.

Whose costs are so low and I -- have a repeat this figure because I wasn't sure got to right the cost for this company gold corpus the company.

The cost for producing one ounce of gold is only 250 dollars an -- for them that's a huge profit margin.

It's a huge profit margin and it's one of the highest quality companies out there it's also in the largest -- has a big.

Growth platform as well so it get -- quality blue chip quality high margins big growth about 50% increase announces from.

But two and a half million ounces this year to around three point eight million ounces of after four years.

So they're making tons of cash flow and that's not reflect in the stock price that's about.

That's what we're we're looking -- -- right now so either way on the on the screen put put this put it back up on the screen.

You can see it's close to its one year low right there are so it's not it's a perfect time -- -- Buy low sell high this one has come down -- -- they had some trouble with the mine but.

Tom I think the big question people have a hum though is.

If you think that the precious metals are gonna go higher why not just invest in the precious metals.

You're talking about buying these companies because of where metals prices are going.

Would you suggest that these stocks are gonna attract the models.

Well you -- Francisco -- up about 4% today the gold price up about 3% usually the miners.

-- produce outperformed the gold price and that's up and on the way down record bullish.

On -- we would suggest taking advantage that with the leverage situation in the gold Meyers a well run senior gold Meyer Michael core.

-- -- to have yachts and I'll put them both out -- because we have a little time -- with our satellite -- to get the first back caviar is what about the Fed the Fed has made.

Pretty clear that they're not interested in the QE3 in less things only fall apart US.

But that's one thing that that is might might be depressing the price of gold the fact that the dollar might strengthen as a result of that the second what is if the Euro falls apart.

Doesn't that mean the collapse of the gold price.

Right that's right will the Euro is particularly.

Tied with the bill press that they you're against them -- we -- priced it down because it's a counterweight to the dollar people trying to.

Divest -- a dollar exposure so that's an important consideration now.

The Fed is -- an interesting spot very aggressive accommodative policy on top of the fiscal policy which is out of control so.

We're seeing 31 basis point two years but the inflation rates one point 7% so we have a negative real return on treasuries -- that's the time you want against a hard assets like gold we see that changed.

Wanna go back and financial assets like treasury.

I exit Tom probably gold watchers out there -- -- the price that we should be watching -- looks like right now we're just below 16100 dollars an -- Where's it going.

-- -- up and down quite a bit we expected to end up around 19100 dollars spent in the year it could get extremely volatile though we think.

In the fourth quarter because of that triple witching effect of the expiration of the bush tax cuts and sequester and the debt ceiling -- see a lot of dismay about the dollar in the US they're rethinking the fourth quarter to be higher gold prices as a result.

You know metals are such a crazy market it's so rare to find somebody that's sensible -- actually looks like he's got a an academic background right behind advancement is looking at something out I think Goldie like platinum to top -- -- Midas fund portfolio manager Tom.

Thank you so much for being here appreciate every weekend RA.

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