How did gold get to be so much more expensive than platinum? I thought platinum > gold

Estil

Okay I've got to ask you guys...how in the world did (since 2015 especially) did gold get to be more expensive/valuable than platinum (often almost 2x!). I always thought platnium was traditionally more expensive/valuable than gold and with things like credit cards, trading cards (including the credit card like 1995 Studio), etc...any platinum version had more perks or was more limited edition or whatnot than the gold version. Not to mention most famously of all, gold and platinum albums!!

So why exactly this weird flip flop?

blitzdude

platinum = overpriced gutter metal. Gold is the metal of kings. RGDS!

RobM

Since 2015 the single biggest reason is likely the VW diesel emissions scandal. Platinum is heavily used in diesel catalytic converters. Afterwards, diesel engine use in new cars fell dramatically. The platinum price trended down. Also, keep in mind that even though Pt exists at around 1/15 as much as Au in earth's crust, it doesn't have a very long history with humans compared to gold.

jmski52

The car industry switched over to palladium. At some point they will probably switch back to platinum.

ricko

I will stick with gold and some silver... History says gold will prevail. Cheers, RickO

3stars

A lot of wives with platinum wedding bands who thought they were better than everyone are now singing a different tune

Estil

@3stars said:
A lot of wives with platinum wedding bands who thought they were better than everyone are now singing a different tune

What matters is the person who put the band on your finger, not how much the band costs. Observe...

https://www.youtube.com/watch?v=8erKCQNbF_g
https://www.youtube.com/watch?v=38iv2u2ubAA

WCC

Gold is a monetary metal. Platinum is an industrial metal.

DeutscherGeist

I agree with the OP, its crazy for platinum to be less valuable than gold. I have heard about less platinum being used in the automotive industry, but I am not sure of all the variables involved.

Platinum is at a bargain price right now. It may not be perceived that way if its value continues to remain stagnant. It might just be a new normal for the precious metal.

ricko

Platinum, today, is around half the price of gold.....and gold is still on the downside - except for the spike this morning. The dollar is still strong. Cheers, RickO

WCC

@DeutscherGeist said:
I agree with the OP, its crazy for platinum to be less valuable than gold. I have heard about less platinum being used in the automotive industry, but I am not sure of all the variables involved.

Platinum is at a bargain price right now. It may not be perceived that way if its value continues to remain stagnant. It might just be a new normal for the precious metal.

Platinum as a predominant industrial metal is presumably priced mostly for its utility, use in industry.

Gold is unique among metals, even versus silver. It's the only universally acknowledged monetary metal, a money substitute which includes usage in FX reserves by governments and central banks.

Ignoring this distinction creates your perplexation. Gold isn't valued based upon its relative utility.

This is also my explanation for the consistent expansion in the gold-silver ratio since the 1980 peak. Back then, the ratio was 17-1 after which it exploded and has never approached it since. The closest it got was at the 2011 silver peak when it approximated 40.

blitzdude

@WCC said:
This is also my explanation for the consistent expansion in the gold-silver ratio since the 1980 peak. Back then, the ratio was 17-1 after which it exploded and has never approached it since. The closest it got was at the 2011 silver peak when it approximated 40.

Ratio looking nice now 88 and climbing. royalty beats the gutter. RGDS!

Estil

@blitzdude said:

@WCC said:
This is also my explanation for the consistent expansion in the gold-silver ratio since the 1980 peak. Back then, the ratio was 17-1 after which it exploded and has never approached it since. The closest it got was at the 2011 silver peak when it approximated 40.

Ratio looking nice now 88 and climbing. royalty beats the gutter. RGDS!

Do you sell gutters and gutter accessories? Or install/repair/clean them out? Because you sound so obsessed with them for some reason...

And who or what is this RGDS? Is that like some sort of Star Wars droid?

hfjacinto

All metal costs are based on supply and demand. While platinum is rarer it doesn’t have the desirability of gold hence economics (lower demand = lower price).

While the world currently produces more gold than consumed a significant % of that is recycled gold (27-29%). Miming doesn’t currently produce enough gold hence why the higher price.

As the world market is wonky (war, supply shortages) people have sought protection in gold causing a spike. Lately people have left the gold markers (the coin and stacker market are small % of all buyers) hence the recent price decrease.

Coupled with central backs raising interest rates people have moved money to other areas (like I bills), all of this has led to a lowering of gold price. Central banks are one of the biggest buyers of gold and some will take advantage of the lower price to add to there reserves. Most have a floor they buy at which could then make gold available and a rebound in price. Since platinum doesn’t have the cache of gold it also lost some value but platinum will always be limited as it has a heavy industrial usage (although with electric cars not needing a catalytic converter it may drop further in the future).

The above is my best guess and reading of the chief analysts weekly recap (I work in the financial sector)

WCC

@hfjacinto said:

Central banks are one of the biggest buyers of gold and some will take advantage of the lower price to add to there reserves. Most have a floor they buy at which could then make gold available and a rebound in price.

Based upon the history of central bank behavior I read, I would do the opposite as their timing has been terrible. The ones I have read about (BOE and BoC at minimum) sell low. Might be different for those who have excessively large USD FX reserves.

Goldminers

I believe platinum prices will improve to a price more similar to gold soon within the next several years. The dollar will probably weaken more next year, and new platinum demand will increase.

Part of the reason is increasing demand worldwide, especially in China for "green" hydrogen for fuel cells; initially mostly for big, long-haul trucks. Hydrogen is basically unlimited and is everywhere. No wars or political games are needed to get it, no pollution, no CO2, with just pure water for exhaust.

More platinum is used in a fuel cell than in a diesel auto converter. It is also needed to produce the hydrogen gas itself, using electrolysis, eventually mostly powered from solar or wind. That is a better method for the environment than using natural gas or methane to split it into hydrogen. Low jewelry consumption in Asia is another factor for platinum's recent low price, where demand has been lowered by lockdowns the past couple years.

However, there is a huge platinum deposit with several new mines under construction in Zimbabwe (one is half owned by Russia), that could eventually supply much of this future increased platinum demand. However, this new production won't get going for several more years, so between now and then, there should be a significant move up.

But Iridium may be the precious metal to watch.

RobM

@Goldminers said:

But Iridium may be the precious metal to watch.

And watch is about all one can realistically do. The spread between buy/sell is more than 25% if an individual wants to buy some in powder form. That said, I have comtemplated buying both Ir and Ru. But never pulled the trigger.

JohnnyCache

Goldminers

There used to be Degussa one-ounce bars of Ir and Ru, and a really plain looking round. There are also 1-gram beads of them, about the size of 00 buckshot, but there is probably a real source somewhere in Europe.

Estil

@JohnnyCache said:

Wow you must be rich!

JohnnyCache

@Estil said:

@JohnnyCache said:

Wow you must be rich!

Hardly, far from it.
This post just needed pictures

SilverPlatinum

@Goldminers said:
I believe platinum prices will improve to a price more similar to gold soon within the next several years. The dollar will probably weaken more next year, and new platinum demand will increase.

Part of the reason is increasing demand worldwide, especially in China for "green" hydrogen for fuel cells; initially mostly for big, long-haul trucks. Hydrogen is basically unlimited and is everywhere. No wars or political games are needed to get it, no pollution, no CO2, with just pure water for exhaust.

More platinum is used in a fuel cell than in a diesel auto converter. It is also needed to produce the hydrogen gas itself, using electrolysis, eventually mostly powered from solar or wind. That is a better method for the environment than using natural gas or methane to split it into hydrogen. Low jewelry consumption in Asia is another factor for platinum's recent low price, where demand has been lowered by lockdowns the past couple years.

However, there is a huge platinum deposit with several new mines under construction in Zimbabwe (one is half owned by Russia), that could eventually supply much of this future increased platinum demand. However, this new production won't get going for several more years, so between now and then, there should be a significant move up.

But Iridium may be the precious metal to watch.

Thanks for the detailed analysis....

3stars

@Goldminers said:
There used to be Degussa one-ounce bars of Ir and Ru, and a really plain looking round. There are also 1-gram beads of them, about the size of 00 buckshot, but there is probably a real source somewhere in Europe.

https://www.elementsales.com/pl_element.htm#ir

pretty good website for raw materials