By Jessica Mead
With gold’s sudden surge stealing both the headlines and the market’s attention, it is very easy to forget that there are markets in other precious metals. For spread betters looking to move beyond the realms of gold to something altogether rarer and more unique, platinum currently offers a wealth of opportunities.

One of the scarcest precious metals on the planet it is estimated that new mine production is only about 210 tonnes per year. The price of platinum has suffered during the financial crisis because of the global reduction in manufacturing and investors’ lack of enthusiasm for metals.

Back in May 2008, an ounce of platinum would have set you back more than $2,200. Today it is trading at near one-year highs of $1,330, having dropped as low as $732.50 on 28 October 2008 as investors moved out of risky commodities towards perceived safe havens such as gold and US Treasuries.

And last week, the chief financial officer of Stillwater Mining, North America’s largest platinum group metals producer, told Reuters in an interview that the worst was over for platinum and that the price has now bottomed out and should rise significantly over the next two to three years as economic recovery boosts investor demand.

Although demand currently remains depressed for the precious metal, its industrial uses in the automotive industry and in electrical components mean that there is likely to be a demand-led recovery in the price of platinum as the fragile global manufacturing sector starts to exit recession.

Platinum is most commonly used by the automotive industry in catalytic converters, which help clean exhaust fumes. Admittedly, the last 12 months have seen car manufacturers suffer and in the case of General Motors even file for bankruptcy, which has had a subsequent negative impact on the price of platinum.

But in the near-term, government stimulus programmes encouraging consumers to replace their old cars will give the auto industry and its platinum suppliers a much-needed boost. Equally, mid-income developing countries such as China and India are expecting demand for private vehicles to surge as the population becomes wealthier.

Furthermore, with the future expected to be a much greener one and legislation on the way to reduce cars’ carbon emissions, the need for catalytic converters is only going to grow and platinum demand is unlikely to falter.