Trading the Platinum vs. Gold Spread

Twenty years of trading has proven one thing correct, time and time again. The markets act in such a way as to do the greatest amount of harm to the greatest number of participants at any given moment. This is exactly how Sunday night’s trading began when, for a few minutes, traders were able to trade gold and platinum at the same prices. There were two opportunities on Sunday night. The first was shortly after the open and the second was around 2am Eastern time as you can see on the chart below.  READ MORE………

Gold vs. Platinum

platinumMost of the talk about investing in precious metals revolves around gold and silver. Platinum does not seem to have as many champions. Gold or Platinum? What will the price charts reveal in trying to determine which asset will perform better in the coming years?

Gold outperformed Platinum between 2008 and the end of 2012. The question at hand is will that trend continue, or has a new trend begun?

Relative to volume mined, platinum has many more industrial uses than either silver or gold. In fact, more than 50% of the yearly production of platinum is consumed by industrial uses. Perhaps this would explain why Platinum prices crashed as the US economy began contracting in 2008.  READ MORE…….

 

PRECIOUS-Gold flat, supported by slowdown worries; outlook seen weak

Gold prices were steady on Thursday, supported by renewed worries about a global economic slowdown, but bullion’s failure to rally at a time of extreme volatility in equity and energy markets suggested the metal could pull back in the near term.

Economic growth fears hit demand expectations for industrial metals and palladium, which is used mostly by the automobile industry as a catalytic converter. Palladium dropped 5 percent briefly before paring losses.

Gold was underpinned after James Bullard, president of the St. Louis Fed and a top U.S. central banker, said the Fed should keep buying bonds for longer than planned in the face of volatile markets and falling inflation expectations, even as another Fed policymaker warned against over-reaction.  READ MORE ……

 

Platinum Falls Below Gold for First Time Since April 2013

Platinum dropped to the lowest in more than a week in London, falling below the price of gold for the first time since April 2013, on concern that slowing economic growth will curb demand.

Platinum is mostly used for automotive catalytic converters, with industry accounting for more than 50 percent of usage, according to Johnson Matthey Plc. That compares with about 10 percent for gold, which reached an almost five-week high yesterday as investors sought a haven and after the Federal Reserve indicated a worldwide economic slowdown may delay interest-rate increases.

Platinum slipped about 16 percent since mid-July, partly after a South African mine strike that deepened a third straight supply shortage ended. Prices have also retreated on concern slowing economic growth in Europe will reduce demand. Gold had erased gains for this year earlier this month as signs of an improving U.S. economy boosted the case for less U.S. stimulus, strengthening the dollar and curbing precious metals’ appeal.  READ MORE …….

 

Labor strife, safety concerns push South Africa platinum mechanization

For decades, production in South Africa’s platinum mines has rested on the muscular shoulders of men risking life and limb to drill into the rock face with jackhammers.

Three years of labor upheaval and a political push to make the shafts safer and transform the low-wage workforce have set in motion a drive to replace such rock drillers with machines.

“Labor militancy is dictating our push to mechanization and boardrooms will rubber stamp this stuff,” said Peter Major, a fund manager at Cadiz Corporate Solutions.

The costly change is happening despite the obstacles thrown by geology, low platinum prices and capital constraints. READ MORE ……..

 

 

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