Are the summer doldrums a thing of the past?

Gold first broke above $2400/Oz on 17 May 2024. Staying above that threshold was not evident. It lasted for three trading days.

Platinum - Palladium price inversion: end of an anomaly

The April article pointed to catalyser metals losing their speculative premium. Palladium has been over three times more expensive than platinum after the former recovered rapidly after the dip during the Covid pandemy frenzy.

Catalyzer metals lost their speculative premium.

About three years ago, the typical catalyzer metals Palladium and Rhodium reached their all time highs in the aftermath of the pandemic. Automobile producers had resumed production, but some mines had been idle because of a drop in demand during the pandemic. Inventories for Pd and Rh were at a historical time low.

Deflating speculative bubble of catalyzer precious metals

For more than three years, palladium has been more expensive than gold. At best gold briefly reached parity. For one ounce of Rhodium you paid, at its peak price, more than tenfold the price of gold at that moment. Both anomalies have since disappeared. Is the speculative bubble of catalyzer precious metals deflating?

Diverging price trends of 'white' precious metals

There is a lot of complaining going on about 'white precious metals'. In some cases producers are struggling to remain profitable, let alone to stay afloat. In other cases industrial consumers are trying to find ways to reduce the amount needed of those expensive metals having even multiplied in price.

Palladium scramble

Guess there is no better way to call this sudden price spike of palladium, the catalytic converter metal by excellence.

Palladium at almost twice the price of Platinum

By mid October it looked as if Palladium was rallying to twice the price of Platinum, with the price ratio hitting 1.974 at the Comex close on 16 Oct. Less than 2% to go ... Eventually it didn't happen.

Diverging price trends among precious metals

Diverging price trends among precious metals

Precious metals in a downtrend over 2018 is a story of the more obvious. The failing gold rally early in the year and the breakdown of silver leading to a gold/silver ratio now over 86. Platinum is another horror story: longs were lured in a failing rally of this denser precious metal. Yet by mid August, platinum plunged to $767.  Even during the four year gold bear market, platinum had not seen such price level. Today (30 Nov), Platinum again is to close below $800/Oz, making the Gold/Platinum ratio rise to 1.533. Two ounces of gold now buy over three ounces of platinum. 

Platinum scalp at the shorter's belt

White precious metals lagging gold

Despite gold selling off last few weeks, the damage among "white precious metals" has been worse.

The gold sell-off was discussed last week, as the yellow metal was nearing its December 2017 low, which it eventually equalled on July 2nd.

End of the Palladium surge?

The Palladium price surpassed that of Platinum late September. Any precedent dates to the beginning of the century. Since October 10, Palladium has been more expensive than Platinum, widening the gap throughout the rest of 2017.

Is a 'Palladium - Platinum price inversion' in the cards?

A 'Palladium - Platinum price inversion' is it conceivable? Well, there has been a precedent:

Near the end of the 20th century, the days of cheap Palladium were numbered. Norilsk used to have ample Palladium supply after starting up its large Russian nickel mine. As the supply overhang disappeared in the late 1990's, the Pd price surged. Remember that gold quoted near its bear market bottom at that time. It didn't take much time for Palladium to leave behind gold. During 1999 Palladium was challenging the Platinum price, occasionally surpassing it on its rocky ride to the top.

A case for the 'white precious metals'

The precious metal recovery in January last year was led by gold, with the white precious metals - especially silver and platinum - following reluctantly. The idea of a more sluggish growth in China translated into expectations of lower demand for industrial metals. In January 2016, copper quoted at a decade low. 

Platinum, Palladium and Silver relative to Gold.

The rejuvenated gold recovery quickly wipes all past hardship from our collective memories. Yet the yellow metal only bottomed on Dec 3, 2015. The 'white precious metals' continued weakening unabated thereafter until somewhen in January 2016.

Metals not equally precious in their slide

From September until the end of the year is repeated over and over to be the seasonally strongest period of the year for precious metals. Such statistics however are averages and calculated standard errors are considerable. Yet we now face the fourth consecutive year with gold selling off during autumn. Could we do any better investing in any other precious metal ?

Metals not equally precious investments ...

While speculators are focusing on price changes of the metal of their choice to set up a trade, the long term investor is better off studying the price changes over the long haul and the relative price changes of one precious metal to another. It is most common to compare gold to any other precious metal through e.g. a Gold-to-Silver, or Gold-to-Platinum ratio. This tells you how many ounces of the second precious metal one ounce of gold would buy.

Platinum group metals, a story of scarcity and industrial needs

Among precious metals, platinum deserves special attention because of several of its characteristics. Unlike gold or silver, platinum is an extremely hard metal, with high wear resistance. Alloying platinum with gold makes the alloy more malleable.  Platinum is denser than gold and has with 21.45 g/cm³ over twice the density of silver. It melts at a higher temperature (1768.3 °C or 2041.4 K) than silver or gold.  Unlike silver and palladium[1] and similar to gold, platinum is not corroded in any normal environment.
(With graphs updated as of Jan 5, 2017)