Can someone please enlighten me as to why Platinum was so volatile in 2008? Then from 2009 onwards it has basically matched the price with Gold as before it was trading a lot higher? :/ Gold weekly chart Plat weekly chart Source: Finviz
You do know there is a platinum sub-forum here? A few here like Ronnie 666 seem to have made a bit of a study of platinum. Lots of debate there about whether Platinum is a monetary metal (it's not, lol) and the dynamic demand/supply situation. http://forums.silverstackers.com/search.php?search_id=305473152&p=2 In 2008 remember there was global freaking out about the future of the world economy and Platinum is rated by many in large part as an industrial metal. Also before the plunge platinum got exceptionally high relative to gold, so arguably it got hit by a double whammy of the GFC panic deleveraging and flight to cash, but also a correction to bring it back into a more normal ratio to gold. Currently Pt is historically underpriced relative to gold. Ephemeral rumours ebb and flow about platinum inventories. Periods of rumoured glut, maybe because of recession in EU auto industry for example. Then the word is its going into scarcity, maybe because of strikes and threats of nationalisation in S.A mines. Doubts can plague a PT buyer though. Central banks buy gold not Pt. Chinese citizens are being conditioned to buy gold or silver not Pt. The Chinese government wants gold to back the Yuan. What is a Greek going to buy to protect any savings left - Gold!
PowPowCombo we were discussing this back on 12/05/12, and it caused me to do a bit of 'research'. Here's one exchange that bears on your question: Platinum did have that spectacular crash in the GFC - much more severe than gold. However let's look at the prices of both metals at the extreme moments: Platinum Peak 'London fix' July 1 2008 US$2,075 Gold Peak 'London fix' March 17 2008 US$1,011 Platinum Low 'London fix' October 27 US$763 Gold Low 'London fix' October 12 US$712 So Platinum's crash was double that of gold's - roughly speaking When Platinum peaked in 2008 it was a bit more than 2x the price of gold. This was way above the historical median ratio of Pt/Gold going back over 30 years. Plat's GFC crash was accentuated because it was too expensive relative to gold perhaps. Maybe it had a double crash - the GFC, plus its own little popped bubble which brought it back into alignment with gold. My point is that, with the Pt/Gold ratio today less than 1, it does not seem likely that Pt would crash more severely than Gold. So while they might crash together, if you are going to risk buying gold today you will run no more risk buying Platinum? The Pt/Gold ratio has got lower than this only a couple of times in the last 36 years. In 1982 it got down almost to 0.7, and in 1985 it got down to almost 0.8. I don't think you'd say that either of those events would be severe if they happened today from a ratio of a bit over 0.9. Also those extremes were short-lived; the ratio was back to 1 again in about 6 months http://forums.silverstackers.com/to...ves-batman-the-price-of-platinum-is-1477.html
Not the OP but thought I'd say thanks for the informative response Finicky. If only that was how all questions were answered, not just with a terse 'use the search function' reply.
Do you guys know that a car manufacturers (who purchased a shit load of pt to ensure supply) sold their plat into the market at a $1B US net loss. They will need to replenish that supply if they haven't already. So no central banks dont buy it - but some big manufacturing companies (bigger than some small countries) do need it, and supply is consumed, unlike gold. The industrial uses for platinum are expanding, also Russia used platinum (not gold) as their money for centuries. Plat is a good investment as long as it is at or under the gold price. I bought at about 1450 as a way to buy cheap gold when the ratio returns to more normal levels.
I really believe Platinum will test its nominal highs (maybe months) before silver or gold this year.
