Is Platinum Worth a Look?

Compelling analysis...plus a competitively priced offer.

 
Clients and Friends,
 
Over the past month, platinum has begun to make a notable run and is, for the first time since 2020/21, showing considerable technical strength as it looks to potentially finally 'wake' from it's multi-year slumber.  We invite you to read on...
 
Platinum/Gold Ratio: From 2000 to 2008, platinum steadily traded at about twice the price of gold, and from 2008 to 2015 at parity with gold.  But from 2015 on, a slow decline in the price of platinum, paired against a steady rise in the price of gold, led to an inversion in the ratio - an inversion which peaked just a few months ago at an astonishing 3.6:1 (meaning 3.6 ounces of platinum could be purchased using one ounce of gold).  Since visiting those levels, platinum has rallied sharply, reducing the ratio to 2.6:1, while bringing the metal to the doorstep of a breakout above the $1300 peak it briefly hit in 2021.  (See chart below). 
 
Gold/Platinum Ratio
Compelling, to say the least...
 
A little backstory... In 2007, a miners' strike in South Africa precipitated a massive shortage in above ground platinum supplies.  Platinum eventually peaked at over $2000/oz in early 2008, nearly doubling in price in just under a year.  During that time, numerous technologies (namely in the computer/smart phone/etc. sector) were just coming on line, and platinum group metals were in high demand.  At the same moment as platinum's meteoric rise, palladium was trading (quite affordably) below $500/oz.  The result?  The majority of technological development opted to use palladium for their designs, kick starting multi-year industrial demand.  Platinum faded fantastically later that same year, all the way back to $750/oz.  But the die was cast, and technology had established its preference in palladium. Fast forward to the last few years.  In March of 2022, sanctions on Russia and an ensuing threat to retain all palladium supplies domestically saw palladium rally to an $3000/ounce.  But just like platinum did in 2008, palladium faded sharply in the weeks and months that followed, eventually trading as low as $860/ounce.  (See Platinum/Palladium Price history chart below)
 
Platinum vs Palladium Price

Which leaves us asking the questions we present to you along with this month's special...

  • Is the platinum/gold ratio poised to revisit the levels it last saw in the 2000's?

  • Did palladium's spectacular run (and similar geopolitical supply risk concerns) doom it to years of price purgatory, to platinum's benefit?

  • Will platinum finally break though the decades old $1300 resistance level, and in so doing, look to revisit or even challenge its former all-time high? 

Final Thought:  In the world of investing, one might reasonably conclude that buying assets that are undervalued - with noted strong upside potential and minimal overall downside risk - a sound strategy.  One could make the argument that platinum currently fits such a profile.  That said, at USAGOLD, we don't routinely venture into the platinum group metals, and this analysis may seem a bit of a departure for us.  Platinum group metals are not considered 'monetary' metals, like gold especially, though also silver, nor are they held by central banks.  We would not classify owning platinum as an 'asset preservation' strategy, nor can we its performance to the value of fiat currencies, central bank malfeasance, or government debt.  However, all said, we'd be remiss not to share this analysis prepared here with our clients.  If it resonates with you, we think you'll find our competitive offer on Valcambi one ounce platinum bars worth the look.  We have 100 one ounce bars available in this offer.  We also have a handful of 10 ounce Credit Suisse bars available at discounted rates.  All are available at the link immediately below, along with a pocket gold special.

 

New to precious metals investing? Request a free, personalized, no obligation discovery call with one of our experts.

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