PLATINUM EQUAL TO GOLD PRICES. WHICH IS BETTER TO BUY?.
. It looks like Platinum and Gold commodity prices are almost the same. I see that most commodity investors talk about buying and owning gold. Is Platinum a waste of time and always buy Gold, or is Platinum also a good investment?
I was also wondering if you were going to buy jewelry, is Platinum or Gold better if they are exactly the same price at the local jewelry stores? In other words, which do you think women would prefer to have their rings or bracelets made out of if Platinum and Gold are the same price? Christmas is coming up and needed some help.
No one can tell you which is the better buy (or sell) right now. Duh.
Even though platinum is thirty times rarer than gold as a percentage of the earth's crust, it has rarely traded at more than double the price of gold. And it can occasionally trade at less than the price of gold. Even though they are both precious metals, they are simply different markets for a number of reasons.
Platinum is mostly a buy-product of copper and nickel production, so its price is not necessarily driven by supply/demand considerations just for platinum itself.
A little more than half the world's production goes into auto catalytic converters, so that industry's problems are an obvious cause of the recent sell-down in paper/futures platinum prices to the dips below $800/ozt and/or the price of gold.
Only ~20% of world platinum production goes into jewelry, and the amount going into coins or other investable forms (like bullion bars) is miniscule.
Physical platinum has stayed up near or above $1100-1200/ozt for 1 ozt coins (appreciably higher than for physical gold) even though the market is much smaller than the market for gold coins. But it's a slightly different market since a high proportion of the coins are mint/proof type coins rather than generic "uncirculated" bullion type coins of the sort you find for gold. So at least recently people have been willing to pay a premium for platinum coins, but it's difficult to tell if they're buying them for the platinum or because of the fact that they're coin collector types.
The wikipedia article on gold as an investment makes the good point that "most of the gold ever mined still exists and is potentially able to come on to the market for the right price ... Given the huge quantity of hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production [which has been running at a deficit compared to demand over recent years]." This is different from the platinum market, where I think annual demand is currently slackening at a greater rate than production is dropping.
So my own guess is that gold will do better over the near term - a couple of months to a couple of quarters - than platinum, but I do own some of the latter in the form of shares in SWC, which I bought recently at less than half book value.
We were in Platinum last year, into this summer, rode it from $1200 to over $2000. At that time, Platinum had strong fundamentals because of its dual use as an investment, as an industrial metal used in catalytic converters, and finally due to the electrical shortages in South Africa (the main source of platinum)
However several things have changed, but most importantly there has been no 'decoupling' from the US market in emerging markets, and the automobile market around the world has taken an enormous hit. This is probably the most damaging thing to the price of platinum.
I am closely watching the price of platinum here, and may be tempted at some point to buy some as an investment, however I believe gold is the one 'group play' the entire world can agree on.
Party on, gold bugs! Your time may finally have come