Sunday , 24 September 2023

The Case For $2,450/ozt. Platinum! (+2K Views)

The Platinum:Palladium  and Gold:Platinum Ratios, plus the decline in supply growth, suggest that we could see much higher platinum prices in the years to come – perhaps by as much as 160.6% were its pricing to revert back to the historical mean.

The comments above and below are from the original article by which has been edited ([ ]) and abridged (…) to a limited degree by to provide a faster and easier read.

Platinum:Palladium Historical Ratio

In August 2001, palladium…crossed the platinum price…[but as soon as that happened] platinum began to rally as well, entering a bull market that would last the better part of a decade and witness a 450% move. The current price of platinum is $940/ozt, while palladium is trading at $890/ozt. That provides a current ratio of 1.06, compared to the historical average of 2.76. If palladium holds steady at current prices, platinum would have to appreciate to $2,450/ozt. to revert back to the historical mean!

Gold:Platinum Historical Ratio

Another historical relationship worth examining is the gold to platinum ratio. Historically, platinum has traded higher than gold 94% of the time. Bucking the historical trend, gold has traded higher than platinum since the end of 2014.

If gold were to hold steady at current levels (something we seriously doubt), platinum must rise to $1,600/ozt to revert back to the historical mean, 0.81. If gold continues to rally, platinum should provide significant leverage as the bull market plays out.

Declining Supply Growth

Historical ratios are not the only thing pointing towards higher platinum prices. In addition to being oversold, platinum is witnessing a decline in supply growth. South Africa, which accounts for 75% of the world’s output of platinum, has averaged almost zero growth since 2010. Mines in the country have been facing serious operational issues as well.
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