After an impressive six months of the price of gold topping the price of platinum, a recent sell-off in gold has caused it to slip below its traditionally more expensive sister metal for two days in a row.
At press time, gold was trading at $1,648.30 an ounce; platinum, at $1,673.
Gold has suffered a sharp decline in the last three days, with most analysts attributing the drop to increasing confidence about the U.S. economy.
James Steel, metals analyst at HSBC, tells JCK he believes that platinum will top gold for a while, and that the spread may even widen in the near-term.
But he cautions that platinum and gold are two different metals, and that their prices are driven by different factors.
“With platinum we have had supply disruptions in South Africa,” he says. “The gold price is reacting more to monetary issues, particularly the jump in bond yields and the Fed Chairman’s statements distancing himself from a third round of qualitative easing.”
He adds: “I think platinum in the short term has more upside than gold. But I think later in the year, we may get a recovery in the euro and a certain level of geopolitical uncertainty with the U.S. elections and other possible changes in governments. It is not sure what that could do to the spread, but platinum would likely not react to that news.”
Whatever happens, Steel notes that this recent run of gold topping platinum was one for the books.
“In the past 20 years we have had only fairly brief occasions when gold topped platinum,” Steel says. “But this time it’s been quite long-lived.”