ETF Securities is pushing for the creation of the first-ever US exchange-traded platinum and palladium funds, Reuters reports today (27th May).

A recent report by Johnson Matthey revealed that platinum demand declined by five per cent to 6.35 million ounces last year, representing the first decline since 1999.

However, the study also showed that platinum investment almost doubled to 425,000 oz, a trend many commentators expect to continue this year as economic conditions begin to recover.

With that in mind, ETF Securities has filed with the US Securities and Exchange Commission in order to establish the US' first platinum and palladium trusts.

According to the Reuters report, the company's plans are likely to be met with resistance from industrial users and may also face a number of regulatory challenges.

Its own platinum exchange-traded fund in Europe has seen sizeable investor inflows - as has the Zurich Cantonal Bank fund - although they only represent less than ten per cent of platinum supply.

Nevertheless, the upsurge followed a tough second half of 2008, when auto production plummeted and platinum, which is used in catalytic converters, subsequently suffered.

Exchange-traded funds operate through investors backing physical holdings of a certain metal or commodity and offer them exposure without having to take delivery.

Source:

Platinum ETFs could soften blow from lower auto demand (27/05/09)

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