Tuesday , 21 March 2023

What Is the Gold:Platinum Ratio Saying About the Direction Of The Stock Market?

The ratio of gold’s price to platinum’s price, i.e., the gold:platinum ratio (GPR), has been impressively correlated with the stock market’s subsequent performance. The stock market performs poorly when the ratio declines and does well when it advances so what is the GPR currently saying about the future of the stock market?

By: Lorimer Wilson, Managing Editor of munKNEE.com

The GPR is a good stock market predictor because:

  • platinum primarily reflects industrial demand, while
  • gold’s price reflects both industrial demand as well as investor demand for a hedge against economic and geopolitical trouble.

As illustrated in the two charts below:

  1. the GPR went UP 137% between late 2008 and late 2009 while
    • the Dow went DOWN 53% during the same period of time.
  2. the GPR went UP 57% between early January, 2020, and mid-March, 2020, while
    • the Dow went DOWN 35% between early February and early March, 2020.
  3. the GPR went DOWN 38% between mid-October, 2020, and mid-February, 2021, while
    • the Dow went UP 78% between mid-March, 2021 and yesterday (June 23rd, 2021).

  • The GPR is UP 19% since mid-February BUT
    • the Dow is also UP 8.6% since mid-February


The Dow is currently holding up very well vis-à-vis the GPR suggesting that investors, collectively, are still bullish on the prospects for the Dow. It must be kept in mind, however, that there is a time lag between when the GPR peaks and the Dow bottoms so this dynamic should be closely watched in the month ahead.

A Few Last Words: 

  • Click the “Like” button at the top of the page if you found this article a worthwhile read as this will help us build a bigger audience.
  • Comment below if you want to share your opinion or perspective with other readers and possibly exchange views with them.
  • Register to receive our free Market Intelligence Report newsletter (sample here) in the top right hand corner of this page.
  • Join us on Facebook to be automatically advised of the latest articles posted and to comment on any of them.
 munKNEE.com has joined eResearch.com to provide you with individual company research articles and specific stock recommendations in addition to munKNEE’s more general informative articles on the economy, the markets, and gold, silver and cannabis investing.
Check out eResearch. If you like what you see then…


Sahifa Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.