Gyroscopic Investing

It's cheaper than gold now.

That hasn't happened in a long time (if ever).

At some point platinum will be a good speculative play. 

I know nothing about platinum.

Do you favor individual platinum miners, PLTM (platinum-miner index) or PPLT (physical platinum shares)?

Hmmm MT reading my mind... I just spent the past few hours reading up and glancing over some platinum data. It is shaping up to look like a good speculative play.

That little platinum window closed up.  It's now about $20 higher than gold.

People also LOVE platinum jewelry in many parts of the world.

I can't speak to the speculative aspects of platinum, but I think the last five trading days has demonstrated quite effectively why gold is by far the best precious metal to have in the PP. 

Pkg Man wrote: I can't speak to the speculative aspects of platinum, but I think the last five trading days has demonstrated quite effectively why gold is by far the best precious metal to have in the PP. 

No doubt.  This is a purely speculative move.

However, I view platinum as having a lot in common with silver and silver has seen huge speculative gains, while platinum has not participated at all.  When platinum does begin to attract speculative interest (as it did leading up to the 2008 crash), we could see some very strong moves.

Platinum is more of an industrial metal, which, like silver, can impact it's price to the downside when fear of a recession kicks in.

MediumTex wrote: It's cheaper than gold now.

That hasn't happened in a long time (if ever).

At some point platinum will be a good speculative play. 

MT,
About 6 months ago I compiled a bunch of data on historical PM prices (I just pulled numbers off various internet sites) so I could see how the current gold/silver ratio compared to years past. I also figured the past gold/palladium and gold/platinum ratio as well. Here's the past gold/platinum ratio:

1996 1.00
1997 0.80
1998 0.80
1999 0.66
2000 0.44
2001 0.58
2002 0.58
2003 0.51
2004 0.51
2005 0.53
2006 0.57
2007 0.54
2008 0.97
2009 0.62
2010 0.80

Last week gold and platinum sold for almost exactly the same price (i.e. a ratio of 1.00). As of today, the ratio is 0.97.  Based on past ratios, that means platinum is undervalued versus gold, perhaps by quite a bit. That's why I bought some platinum Koalas a few days ago.  Let's see if prices revert back to their historical norms.

Isn't it all about catalytic converters. Catalytic converters used to all use platinum and that pushed up the price until they found a way to use palladium instead but for diesel engines they still have to use platinum. Basically buying platinum is betting that lots of trucks are going to be made. Buying gold is betting that people will have more money to invest than the real economy (such as truck makers) can use. 

Platinum crashed down even harder than gold at the same time and is now $1564/ounce as compaired to gold being $1648/ounce. It seems amazing how the timing was so coordinated for gold, silver and platinum.

Platinum is now selling for $160 an ounce less than gold.

That's pretty surprising.

One day people might kick themselves for not buying a little platinum when they could have picked it up for $1,537 an ounce.

I understand that platinum prices are driven by industrial demand, but platinum prices today are the same as they were in November of 2007, while gold prices today are double what they were in November of 2007.  Sooner or later I think the historical price relationship between platinum and gold will begin to reappear, or at least we will begin drifting closer to the historical relationship.

All of this is just for speculative purposes, of course.

Medium Tex, do you think the platinum price is manipulated? It seems so amazing that it crashes in lockstep with gold. It looks to me as though everything is being done to prevent would be goldbugs shifting/extending to other precious metals. I find the gold price movements very mysterious.  I suppose it is very much easier to shift small markets such as platinum, paladium and silver as an adjunct to gold price shennanigans.

stone wrote: Medium Tex, do you think the platinum price is manipulated? It seems so amazing that it crashes in lockstep with gold. It looks to me as though everything is being done to prevent would be goldbugs shifting/extending to other precious metals. I find the gold price movements very mysterious.  I suppose it is very much easier to shift small markets such as platinum, paladium and silver as an adjunct to gold price shennanigans.

Nah, I just think the platinum market is thinly traded and a soft patch in demand can cause the price to drop a lot.

Medium Tex,  very big drops in platinum price have occured the same day as big drops in gold. That massive drop in gold price that happened on a Sunday night back in September had even more dramatic drops in silver and platinum at exactly the same time. That has to be a link. That isn't down to truck manufacturers coincidently not wanting as large a platinum supply that night.

Platinum is down to $1347 today 

This is one of those periods in life where platinum is cheaper than gold!

I just had the shank of an antique platinum, diamond, and sapphire ring replaced. The jeweler considered platinum to be worth more than gold or silver.

MarySB, I guess he was a few months out of date. My dentist told me that the paladium in gold teeth was the expensive bit. I suppose he learnt that a decade ago.