It’s all about the Platinum: North American Palladium (PAL)

North American Palladium Ltd. (Public, AMEX:PAL) jumped 60% today, rising from $1.01 a share all the way up to $1.61. North American Palladium is a producer of platinum group metals (PGMs). If you've been following metals prices, you know that Platinum and Palladium has had an abysmal year in 2008. Just check out this brutal 1 year chart for Palladium per ounce.

So why is PAL up 60%, when Platinum is at a 5 year low?

Good question – and there is no easy answer.  PAL has had no earnings or press releases since November 11th.  My take on the situation is someone knows something.  Average daily volume is 797k and today volume was 3.4 million. Maybe some buyout news was leaked? Or could this just be an elaborate pump and dump?

Another argument is that Platinum and palladium is strengthened a touch as the market soaked in the news that the rescue plan for ailing U.S. automakers was finally sealed, which could improve the demand outlook for the metals used in catalytic converters.

If that’s the case, obviously this is only going to provide short term support for PAL.

Fellow Stockmasters, it’s my opinion that Platinum is severely undervalued right now.  Just like oil, it went up really high, and probably crashed lower than it should be, and we’ll see it average up in the next few months and years. In spite of that, don’t gamble away all of your bankroll on a penny stock play like PAL, when there is no news to justify a huge jump like it had today. If you’re seriously interested in investing in Platinum, maybe buy a few shares of PAL but also take a look at some ETNs (Exchange Traded Notes) there are no platinum ETFs in the Unites States but you can get exposure through these:

• E-TRACS UBS Long Platinum (PTM)
• E-TRACS UBS Short Platinum (PTD)
• iPath DJ AIG Platinum TR Sub-Index (PGM)
• ELEMENTS MLCX Precious Metals (PMY)

If you’re looking for Platinum teeth (or looking to laugh at them), you can kind find plenty at http://www.showyagrill.com