In the previous sections of this edition of the Market Overview, we presented the demand and supply outlook for platinum and palladium. In that part, we would like to analyze the potential benefits of adding these precious metals into the investment portfolio.
The gold-to-silver ratio is the most popular ratio among the precious metals. However, we can also link gold prices to platinum prices. Mathematically, the gold-to-platinum ratio is the price of gold divided by the price of platinum.
For a relatively safe investment, the market says investors should be selling gold and buying platinum. That can be done either by buying a platinum exchange-traded fund and selling a similar amount of a gold ETF or simply by trading gold coins for a greater number of platinum coins.
Buoyant North American demand is a rare bright spot for the global platinum jewelry market after a sharp drop in prices boosted jewelers' margins, driving up consumption of the white metal by more than a third over the last six years.