Rumours have increased that there could be a launch of a platinum exchange-traded fund (ETF) in the near future.

Platinum prices have increased considerably following the speculation, but experts have claimed that it is doubtful whether such a fund would ever come into being.

Reuters quotes analysts as saying that an ETF is unlikely, not least because of the current position of the platinum market, where production is almost level with demand.

John Reade, head of metals strategy at UBS Investment Bank, told Reuters: "I am not writing it off but nor do I think that it is necessarily going to happen. There are quite a lot of question marks. I have heard nothing concrete."

That scepticism has not stopped platinum prices jumping the most for almost 20 years.

If an ETF is set up, it would mean that every purchase of platinum would have to be matched with a storing of the precious metal, something which would put significant strain on the already stretched platinum market.

"If somebody did try to set up an ETF, the physical buying that would be needed (to back the product) would be quite disruptive to the market," explained Mark Bedford, Director, Precious Metals Marketing at Johnson Matthey.

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