A question about platinum vs. gold from the Coin Forum

jmski52

rons posed this question in the Coin Forum, and I figured it was a good question but that the discussion belonged here.

With the price gap between gold and platinum currently $338/oz is gold too high or platinum too low? Which is the better buy at this time? Opinions and insight welcomed

The most basic fact about platinum is that it is 10X rarer than gold. The second most basic fact about platinum is that it is used in numerous critical processes in several industries.

Gold is seen as real money, while platinum is seen as a precious metal. That being said, I think that platinum is undervalued relative to gold, and that gold has a long ways to go before it is fairly-valued vis a vis the dollar.

RedHerring

As you noted Pt has numerous industrial uses. Au is strictly money. While gold has a ways to go, possibly even to $3,000 in the next couple years, Pt will benefit also as a PM and as industrial use increases.

Will Au pass Pt? It certainly could but I don't think it will in this cycle anyway. I believe Pt will hit $2,500 before Au does.

calleocho

is there a 10 year chart of gold to platinum ratio?

Off the top of my head i remember 2007 being almost 2 to 1 ...and then 2008 being almost 1 to 1

CaptHenway

Supply (or rarity) is only one factor in price.

The other is demand.

Platinum may be ten times scarcer than gold, but the demand for platinum is far less than the demand for gold.

Markets, like water, tend to find their own level.

TD

rons

Consulting the crystal ball, do you forsee platinum usage increasing in the future or is it mostly limited in its applications? I seem to recall from chemistry sometime last century that platinum and gold have many similar properties but no recollection of one being better than the other especially with the cost differential. And thanks jimski52 for guiding this question to the proper forum

derryb

Platinum is underpriced simply because it has not yet seen the panic buying that gold has. Platinum is a good buy now if gold continues its rise.

Overdate

<< <i>is there a 10 year chart of gold to platinum ratio?

Off the top of my head i remember 2007 being almost 2 to 1 ...and then 2008 being almost 1 to 1 >>


For a brief period in 2008, the prices of gold, platinum and rhodium were almost identical. Gold actually passed platinum at one point.

At the time there was plenty of pent-up investment demand for platinum, but limited ways to acquire it. There were no exchange traded funds (at least in the U.S.), and common Platinum Eagles were fetching premiums of 25 to 30 percent over metal value.

With a platinum ETF now firmly established, I don't expect gold to overtake platinum again in the foreseeable future.

jmski52

Remember that not too long ago, the electrical supply in S. Africa that supplies the platinum mines failed long enough to cause a spike in the price. The mines keep getting deeper and more difficult, putting more strain on the electrical supply for cooling water at deeper levels. I can't help but think that this means more expensive production. Of course, the same is also true for gold.

calleocho

I think platinum's rarity would be its own undoing.

Since most of its use its industrial, it would either become excessibly rare and hard to find or its price will go so high that industry will have no choice but to find more plentiful and cheaper alternatives.

CoinCrazyPA

<< <i>

<< <i>is there a 10 year chart of gold to platinum ratio?

Off the top of my head i remember 2007 being almost 2 to 1 ...and then 2008 being almost 1 to 1 >>


For a brief period in 2008, the prices of gold, platinum and rhodium were almost identical. Gold actually passed platinum at one point.

At the time there was plenty of pent-up investment demand for platinum, but limited ways to acquire it. There were no exchange traded funds (at least in the U.S.), and common Platinum Eagles were fetching premiums of 25 to 30 percent over metal value.

With a platinum ETF now firmly established, I don't expect gold to overtake platinum again in the foreseeable future. >>



What is the ticker for platinum ETF in the US, I heard talk about it a year or so ago but never heard if it went through.

HalfStrike

Silver is the poor man's gold, I would think platinum is the rich man's silver. I would not buy platinum for an inflation hedge but only if one is speculating everyone in China and India wants to drive a car someday with a catalytic converter.

Overdate

<< What is the ticker for platinum ETF in the US, I heard talk about it a year or so ago but never heard if it went through. >>

PPLT

meluaufeet

I thought Platinum was correlated to the price of gasoline...

derryb

<< <i>What is the ticker for platinum ETF in the US, I heard talk about it a year or so ago but never heard if it went through. >>



The Ultimate guide to the Platinum ETF

gsa1fan

<< <i>Supply (or rarity) is only one factor in price.

The other is demand.

Platinum may be ten times scarcer than gold, but the demand for platinum is far less than the demand for gold.

Markets, like water, tend to find their own level.

TD >>



+1 gold is $ world wide. Platinum is a PM of little supply or demand.

Not saying it will not have it's day but not any time soon.

The world as we know it is in a money scare not a Platinum one. JMO Peace, Tim

ttown

Seems to me in 79/80 I remember that they were about the same price at their highs. Of course cats on cars didn't start until around 1974 so demand is greater for Plat now even though cars aren't selling so we're in un-charted waters as far as I'm concerned.

Gold you know the Central Banks are hoarding and that can't be said for silver or Plat.

RedHerring

Some tidbits on Pt - Rich Man's Gold........

Rich Man's Gold

pf70collector

Although I collect Platinum in collector type coinage, I prefer my collectibles in gold. Whether they be commems, reverse proofs, uhrs, buffalos, I am slowly getting out of some of my platinum holdings. I am still perplexed why the 2006 W Platinums are not doing better even when they are dethroned by the 2008s W's. I believe they will probably see some progress in 10-20 years but not now it seems.

jmski52

I bought alot of multiples in the scarcer Plat issues in order to trade for the common Plats "down the road". Well, it's now "down the road" and my Registry set ought to start seeing some improvements as I start filling in the gaps.

As George Bush might have said, I "misunderestimated" what both platinum and Platinum Eagles were going to do. Although they haven't done badly, platinum isn't as high as I thought it would be and neither are the Platinum Eagles. So, it will be an even trade - just at lower levels.

Platinum has lagged gold and silver recently. All the more reason that I think it will do well in the not-too-distant future. Those Platinum Eagles will perform one way or the other, so I wouldn't be too disappointed if the 2006-Ws don't have as much of a premium. I'd rather have owned platinum since 2006 than stocks.

HalfStrike

I love the gold too, but am not selling any W unc plats. I think they are on a slow train upward, and in a few years the prices will be very good.