The perception among some platinum companies that exchange-traded funds (ETFs) are squeezing an already-tight market and have ushered in levels of volatility that impair the ability to plan is an erroneous one, it has been claimed.

Recently two platinum ETFs were launched, but a number of platinum companies have boycotted the trading platforms and have argued that they drive up prices.

However, according to Daniel Sacks, of Investec Commodity Fund, the tight demand and supply ration in the platinum market acts as a bulwark against the ETF having too much effect.

Mr Sacks told MiningMX: "Just about every ounce of platinum produced each year is delivered to a jeweller or autocatalyst manufacturer at some point.

"It's not like gold, where you have those vast quantities sitting in vaults around the world. The platinum market is about a tenth of the gold market."

News of Mr Sacks' comments comes after ETFs continue to prosper despite opposition to them - a fact confirmed by ETF Securities last month announcing it is to launch new platinum and palladium-backed funds on the Italian trading bourse.

Sources: 

Metal scarcity tough for ETF backers, 12/07/07
http://www.miningmx.com/mybk07/215390.htm

Scarce resources keep PGM ETFs from taking off, 12/07/07
http://www.resourceinvestor.com/pebble.asp?relid=33818

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