Over recent weeks we’ve discussed the various fundamental reasons for the strong performance of firstly gold, then silver. After being outperformed by gold, silver has played catch-up and realigned in line with the traditional gold-silver ratio. In early March 2016, the ratio moved to highs of over 83:1 (the highest in 21 years), but has since declined towards its long-term average level of 55:1, as it currently trades around 68:1. The interesting extension out of all of this is to try and interpret what might happen with platinum as a potential investment option. Does it hold appeal as a precious metal that is yet to be appropriately valued in the context of long-term assumptions? Over recent decades the ratio has been below 0.8:1, but at the moment it's around 1.2:1. Based on previous history, this suggests the potential for a sizeable platinum price improvement relative to gold. Another way of looking at it is that over the past four decades platinum has traded at an average $200 premium to gold, however gold is now at a $345 premium to platinum.
what is the best way of getting into platinum?