The influence of existing platinum exchange-traded funds (ETFs) is not likely to be critical to the market, it has been claimed.

Since opening three months ago, the two ETFs, managed by Zurich Cantonal Bank and ETF Securities, have accumulated a total of 86,000 oz of platinum.

This is equivalent to around just 1.3 per cent of the world's mine output of the metal, according to figures cited by Reuters.

The relatively small volume of platinum attracted by the ETFs contrasts with the proportion of silver garnered by the first-ever EFT for the metal which had attracted 14 per cent of the world's silver output within three months of its opening in 2006.

The slow pace of trading in the platinum ETFs has added weight to some analysts' perception that the funds will not prove a significant influence on platinum prices and trading patterns.

Jeremy Coombes, general manager at Johnson Matthey, said: "Unless something is opened in the US - which would probably attract much bigger volumes - I don't think the ETFs are going to be such an important force."

Should a US fund be launched it is likely to prove much more significant to the development of the platinum market because there is a larger investor base on the retail side in the US than in Europe.

Meanwhile, the US market is also marked by larger amounts of investors putting money in precious metals and more investment funds, both of which are also likely to boost interest in ETF, Reuters reported.

Source:

Platinum ETFs fail to stir market, seen supportive, 27/07/07
http://africa.reuters.com/business/news/usnBAN755146.html

Ÿ Adfero Ltd