Month: August 2019

Is it time to buy platinum now?

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Platinum has usually been more expensive than gold historically. Lately, the arbitrage between the two metals has been exploding since gold moved up in 2019 (see chart below). Investors who want to bet on this arbitrage opportunity might want to get into the platinum market now. Palladium has doubled in price and manufacturers will start substituting palladium with platinum in petrol cars, boosting platinum demand. Additionally, fuel cell cars use platinum and I see this area growing ten years from now.

Copper/Gold ratio declining, Silver/Gold ratio increasing

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So copper has been weak due to lower China growth. The copper gold ratio has been going down, and this is correlated with a lower 10 year bond yield. This all started when Trump announced tariffs in 2018.

 

Now, when copper goes down, the copper production will go down and silver by-product production will decline as well. This translates into a higher silver price, because of less silver supply.

The silver/gold ratio is starting to move up now.