Gold vs. Platinum: Is There a Favorite?
Au” and “Pt” may be dull chemical elements, but gold and platinum have certainly played their respective parts during the unfolding of the financial crisis. Revisiting the metals’ movements, it is clear from the table below that gold’s decline was much smaller than that of platinum – as platinum suffered from the deterioration in the auto industry – but the recovery of gold has also been lesser than that of platinum. click to enlarge The weekly chart of platinum relative to gold illustrates the massive underperformance (declining green line) of platinum relative to gold from May to early December. However, platinum has since reversed course and outperformed (increasing green line) gold to the extent that it now commands a premium of 16% – up from parity in December. click to enlarge The red line shows the platinum price, having peaked in March 2008 at $2,251 and topped out relative to gold in May at a premium of 140%. Technical analysis-orientated readers will also notice the blue MACD
