Gold price

[Celsius]

I look at the gold price and think it is priced fair.

 

But then I look at platinum price and I think it is priced stupid.

 

Why has there been such a disconnect between platinum and gold in the past 10 years?

 

It makes zero sense especially since platinum has as much industrial use as gold?

[JBChiangRai]

4 minutes ago, Celsius said:

I look at the gold price and think it is priced fair.

 

But then I look at platinum price and I think it is priced stupid.

 

Why has there been such a disconnect between platinum and gold in the past 10 years?

 

It makes zero sense especially since platinum has as much industrial use as gold?

 

I haven't a clue what the prices are, but I would expect platinum to be priced much higher as it is both rarer and has much more use than gold, specifically as a catalyst.

[Celsius]

But it is not.

 

Gold price 2626 USD

 

Platinum price 961 USD

 

This has been going on for the   past 10 years and it makes no sense.

 

It seems to me like gold is being treated like crypto. Even the silver prices are not what they should be with the price of gold this high.

[ballpoint]

Gold's value is due to it being an internationally recognised and accepted intangible store of wealth, rather than its practical use. 

 

Past Month:

 

 

 

Past Year:

 

 

Buy Gold & Silver Bullion Bars & Coins (bullionstar.com)

[Celsius]

1 minute ago, ballpoint said:

Gold's value is due to it being an internationally recognised and accepted intangible store of wealth, rather than its practical use. 

 

But this has always been the case and platinum was always valued higher.

[ballpoint]

It's really only since the early 20th century that platinum was valued higher due to its rarity, but, perversely, the relative abundance of gold vs platinum was what made gold the historically accepted currency - it was far more practical to mint gold coins than platinum ones.  Gold has retained that status, and continues to be seen as a safe haven in times of uncertainty, which we are definitely in today with BRICS wanting to establish a commodities backed (predominantly gold) reserve currency, and the US at the point where annual interest owed on debt is equal to military spending. Something is going to give, and gold is seen as the place to be when it happens.  Central banks certainly see it that way, and their buying is in part what is fuelling the rise in price:

 

Central Banks | World Gold Council

 

The historical comparison of gold vs platinum also tells the story.  For the 19th, and much of the first half of the 20th, centuries, when the British controlled the world reserve currency, gold was artificially pegged in order to prevent volatility. (While platinum was virtually valueless during the 19th).  It then found its own level during and after WW2, as Britain lost hegemony.  It achieved parity with platinum during WW2, and again during the inflationary period of the 1970s.  The 2008 GFC saw the beginning of its rise above platinum, and the uncertainty caused by Covid sealed its higher position.  With the Ukraine war, the now accepted use of gold as a petrocurrency, and continuing US financial uncertainty, it is expected by many to keep rising.  On the other hand, platinum, having no such financial safe haven value, continues to be priced according to its demand for jewellery, electronics, and other minor uses.

 

Platinum Price vs Gold Price Ratio | 125 Year Chart (sdbullion.com)

[Hamus Yaigh]

Platinum prices (albeit more expensive to mine) are predominantly determined by industrial usage. This is currently relatively lower than in the past meaning platinum is cheaper than gold whilst gold also holds its higher value as an historical store of value which is currently rising as interest rates fall.

[Iron Tongue]

3 hours ago, Celsius said:

 

But this has always been the case and platinum was always valued higher.

Metal values are transitory.

At one time, aluminum was worth more than gold or platinum.  It was used to adorn the crowns of Europe 150 years ago.  Now it is the 4th most common material in the earth.

 

[Unamerican]

3 hours ago, Celsius said:

platinum was always valued higher.

In what sense is the “value” higher?  Is this not identical to comparing apples and oranges? 

In that a given quantity of one metal (measured b6 volume, by mass or by ??) may be totally different in untility compared with another metal.

 Rarity is far from the only thing that makes metals valuable!  

see, for example, . . .   Left to the student.  

[Unamerican]

15 minutes ago, Iron Tongue said:

Now it is the 4th most common material in the earth.

Did the earth change thus, and so recently?? 

[Unamerican]

All these charts totally fail to take into account how useful a Troy Ounce of each commodity actually is!  

Just because two things are metals, it does not follow that comparing equal weights is at all meaningful, does it?  

Why not also similarly compare the price of Helium or Caviar per Troy Ounce! 

[Unamerican]

Thus Gold is only at all valuable because it is valuable, in a totally artificial market.

Some Other things are valuable due to their being needed to produce value by doing or making useful things happen! 

[Lacessit]

The biggest industrial uses of platinum are in catalytic converters for ICE vehicles, and refining of crude oil into petrol and diesel.

 

Given the switch to EV's, a drop in demand appears logical.

[KannikaP]

38 minutes ago, Iron Tongue said:

Metal values are transitory.

At one time, aluminum was worth more than gold or platinum.  It was used to adorn the crowns of Europe 150 years ago.  Now it is the 4th most common material in the earth.

 

Is that why the Earth is getting lighter, and the heavier water is pushing the ground down !   555

[ballpoint]

1 hour ago, Unamerican said:

Did the earth change thus, and so recently?? 

 

The earth didn't change.  People did.  Aluminium has always been by far the most abundant metal in the earth's crust, making up about 8% of it, but is never found naturally in pure elemental form. The vast majority of it is tied up in aluminium silicates.  Therefore, until a relatively efficient way of extracting it from these compounds was developed, pure Al metal was indeed very rare - it was only confirmed as an element in 1808, and the first solid bar created in 1855, but now, due to its large number of uses, it's one of the most abundant metals we have.

[ericbj]

Basel III reclassified gold as a Tier 1 asset, which means essentially that it is an asset without risk of default by a third party.

 

This has incentivised central banks, at least those of them with any sense, to increase their gold holdings in recent times, going against their former practice of selling off their reserves and deprecating gold as "a pet rock".

 

Fiat currencies are acknowledgement of a debt owed by the issuing banks.  In times of economic chaos (which we seem to be approaching) banks can default on their debts.

 

Central banks have an alternative solution to defaulting on un-repayable debt.  They can "print" vastly more money in order to make repayment.  Of course the money they repay is worth vastly less.

 

They have been doing the latter in a modest way for years and the general public seems to have taken in its stride the currency devaluation, commonly described as "inflation".

 

But with national debt and interest repayments beginning to get out of hand, tighten your seat-belts.

And stock up on gold !  A millenia-old store of value, and particularly valuable in time of crisis.

 

Platinum is an industrial metal.  Industry suffers in a crisis.

 

Silver is also, for about 90%, an industrial metal.  But it is being used up by high-tech faster than it can be dug out of the ground.  Although volatile in price, it is considered to be of very good speculative value at the present time.

 

 

[Cameroni]

1 hour ago, Lacessit said:

The biggest industrial uses of platinum are in catalytic converters for ICE vehicles, and refining of crude oil into petrol and diesel.

 

Given the switch to EV's, a drop in demand appears logical.

 

Platinum is also used in fuel cell electric vehicles, also in hybrid cars.

 

In addition platinum is used in medical equipment. 

 

 

[Cameroni]

Whilst you can trade XPT-USD it is not a hugely popular Forex pair, so the liquidity and volatility of Platinum is not great I suspect, and it is largely insulated from speculative excess. Unlike Gold, which is a major Forex Pair and one of the most popular FOREX pairs people love to trade.