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Little Silver, Big Money

Written by Luke Burgess
Posted August 23, 2005

Dear Wealth Daily reader:

You could get yourself some shiny new gold teeth. But if you really want to shine and you're a true gangsta,' you need some platinum fronts for your grill.

These bad boys could cost you up to $15,000 depending on how many diamonds, or "ice," you want.

And let's be real. If you're going to go platinum, you've got go with as much ice as possible.

But it's not just rappers who are going for the platinum.

Platinum is increasingly becoming the metal of choice for engaged couples. Despite the added expense of the silver look-alike, more people are now choosing the metal for their wedding rings.

Although the word platinum is derived from the Spanish "platina," which means "little silver," its demand, across the board, has been steadily increasing.

A survey by WeddingChannel.com found that 29% of American brides choose platinum settings for their wedding rings. However, the survey did find that they swayed away from the platinum fronts.

Experts suggest that the surge in interest has come as the result of a major advertising campaign from the platinum industry, which has had a big effect on boosting the metal's popularity.

People say that they prefer buying platinum rings because they offer more longevity and are more scratch-resistant than gold. But the fact of the matter is, in most cases, that they're just trying to outshine their neighbors

And it's not just here in the US where people are blinded by the light.

It seems that platinum is one of the metals now desired more than ever in the UK.

According to a poll of 30 jewelers across the United Kingdom, consumers are increasingly buying the white metal.

Platinum is leading the way, and continues to dominate the high-end jewelry sales market.

The metal has experienced a correction after touching a year-to-date high of $930 on August 12.

At last look the most precious metal is trading at $898. But with ever growing demand for the metal for jewelry around the world the metal might soon break another record high.

The number and range of platinum's industrial uses have exploded over the past several decades to include neurosurgical and dental apparatus, drugs for cancer treatment, and, most of all, computer and automotive equipment.

It's estimated that one of every five goods manufactured either contains or is produced using platinum. One of its most essential uses is in auto catalytic converters, in which platinum converts harmful emissions into carbon dioxide and water.

Nearly one third of newly mined platinum is used in this fashion.

Indicative of its robust demand, new uses for platinum are being discovered almost daily amidst a supply that is extremely restricted. Extensive difficulties exist in its mining and production, with between 5 and 6 million ounces of new platinum reaching the world market each year, or about 5% of annual gold production.

Estimates of all of the platinum ever mined would fill a room measuring less than twenty-five feet on each side. Mining and refining the metal is a detailed, exhaustive process of extraction that takes about six months.

Platinum is primarily an industrial metal, and is considered a "strategic metal" by the US Government as a military resource. It is estimated that about 20% of the products purchased by modern consumers either contain platinum or use it in production.

Total demand for platinum falls into eight broad categories:
Automotive - used in catalytic converters, spark plugs, and sensors.
Jewelry - as a substitute for gold.
Chemical processing - also as a general catalyst
Electrical/electronics - for high-temperature and non-corrosive wires and contacts.
Glass - dies and process technology.
Petroleum refining - as a catalyst for crude oil cracking
Dental/Medical - equipment and reconstructive
Investment - bullion and coins

So, what can you do with this information, aside from dazzling your acquaintances at the next cocktail party?

At Wealth Daily, we keep our eyes on dozens of different markets. And, as a result, we're keenly aware when profit opportunities arise. We're not gong to jump into the platinum market any time soon, but it is a hard asset class that deserves your attention.

LOHAS consolidations continue to validate and strengthen the marketplace.

With the success of organic retail giant, Whole Foods Markets, coupled with a number of smaller natural and organic food retailers, manufacturers and distributors, the time is right for massive merger and acquisition activity - just as we saw this morning with Spectrum Organics (SPOP.OB).

A few months ago, when we first told you about Spectrum Organics, the stock was trading around $0.50 a share. Today, the company is being acquired for a 41% premium to that original price.

You can read more about this morning's acquisition at GreenChipStocks.com.

-Jeff Siegel

So Is gold losing its shine?
Not necessarily. But for right now it looks a little dull.

The Fed has signaled that it's going to continue to raise short-term interest rates for a while.

The raise in interest rates will strengthen the dollar, which usually forces gold prices down. But I'm far from bearish on gold in the long run. In fact, there are several global trends aligning themselves to ensure gold's continued bull run.


Gold futures did however close slightly higher yesterday. But it was only a small token of the steep decline they registered last week as weakness in the dollar lured a few investors back to the precious metals market as a hedge against financial losses.

The benchmark contract lost more than $9 last week.

"The short-term move in gold is lower." - John Reade, UBS analyst

But with the long-term budget and trade deficits we face in America, the dollar is certain to weaken again. So don't trade in your gold teeth for plats just yet.

However, in the meantime, gold will continue to undergo sharp corrections.

South Africa Goes Back to Work
A wage deal between the Chamber of Gold Mines and labor unions was signed on today.

A spokesman from The United Association of South Africa said, "Our members are quite happy with the agreement, and we will be continuing discussions on group specific issues as contained in the agreement with the employers."

10,000 mineworkers belonging to, the National Union of Mineworkers and Solidarity, embarked on a strike which ended after the two unions agreed to the revised wage offer about two weeks ago.

The wage deal includes:
wage increases of between up to 7% at the lowest job categories
a wage increase in the second year of CPIX plus one percent, subject to a guaranteed increase of between 5.5 and 6%
additional employer and employee contributions to the retirement fund
increases in the living out allowances as part of a continuing ongoing process of removing the legacy of the hostel system

Dying For Gas

In case you needed further proof, here's how you know gas prices are out of control.

Police in Fort Wayne, Alabama have reported that a gas station owner was run over and killed when he tried to stop a driver from leaving without paying.

We called that the old "pump and run" in college.

Witnesses told police that Husain Caddi, owner of Fort Payne Texaco, "grabbed onto the vehicle" Friday when the driver began to drive off.

Caddi was dragged across the parking lot and onto a highway, where he fell to the pavement and was run over by the late model sport utility vehicle's rear wheel.

Was the station owner's life worth a mere $52? Not in this writers opinion. But what do I know? I'm not a gas station owner.

Our upcoming report, Oil Shock Insurance, wouldn't have save his life, but it could save your portfolio.

Keep an eye out for it in the coming weeks.

- Luke Burgess
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