zaterdag 26 mei 2012

Platinum Demand Falling

In my previous article about platinum I pointed out it was time to trade gold for platinum. You would think that the time has come again to buy platinum, but I fear that the automobile industry is deteriorating again.

Rhodium prices keep falling and I already said that this means that this indicates that demand for vehicles in the automotive industry is dropping. The correlation between rhodium and the automotive industry was discussed in this article

If we look at the platinum to gold ratio (Chart 1) we see that the trend is going down. It is now at a platinum/gold ratio of 0.9. Historically platinum should be more expensive as gold but these days people are fleeing out of industrial commodities and into the safe asset of gold.
Chart 1: Platinum to Gold Ratio
However, during Q1 of 2012 investment demand recovered by 63,000 troy ounces. So a turnaround in platinum is possible.

1 opmerking:

  1. Platinum is more rare than gold and has been historically more valuable, even before its use in cars. Although it's always had a greater industrial demand than gold, its value should hold up long term independently of auto sales; but its existence has only been known outside of South America for a few hundred years, so its use as coins, jewelry and as a store of value, while established, doesn't have gold's long tradition, making its price more volatile.

    Unlike gold, silver and copper, platinum has never been used as a medium of exchange, but it should prove a good store of value, possibly a good investment because of its industrial uses and probably less prone to confiscation than gold because it isn't thought of as money.