Precious Metal Price Convergence

John Robertson

PortfolioDirect

Palladium prices have fallen 14% during June prompting us to ask whether the prices of the major precious metals are set to converge. By definition, any discussion about convergence implies some prior disparity in performance. Deviations from the average can be large and prolonged. Since the beginning of 2013 ( the period in the chart showing relative movements in gold, silver, platinum and palladium prices), silver and palladium prices have diverged by as much as 30 percentage points while gold and platinum prices have maintained their tendency to parity. If the average platinum/palladium price ratio since 1990 is restored at the current gold price, the palladium price would fall a further 44% to $376/oz. To restore the average gold/silver price ratio, the silver price would have to rise 37%.


MORE ON



John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.