Technically and fundamentally, what’s the better deal at these price levels? Gold or Platinum? 
That is the question on several Twitter threads.
Flat for 20 Years
A Futures Open Interest View
Can Platinum Catch Gold?
Just Imagine
Bullish Declining Wedge or Descending Triangle?
I fail to see any reasonable way to make a declining wedge of of this.
Instead, I see a huge descending triangle whose expectation is to break down. And it did break down spectacularly after a nice headfake breakout. The final plunge went to 562.
But what do we make of the second triangle? Is that another descending triangle or is it a symmetrical triangle?
A symmetrical triangle is a continuation pattern. But a continuation of what? Of the long downtrend or rebound from the low?
What about fundamentals? This one is easy.
Platinum Fundamentals
- Catalytic converters: The primary use of platinum is as a catalyst in catalytic converters for cars. This is the largest single use of platinum, making up a significant portion of the total platinum demand. This accounts for about 50% of demand each year.
- Jewelry: Another major use of platinum is in fine jewelry due to its durability, resistance to tarnish, and attractive appearance.
- Medical applications: Platinum is also used in some medical devices like pacemakers and surgical instruments due to its biocompatibility.
The above answer was generated by AI, but that sounds right. And it is one huge oops for hopefully obvious reasons.
50 percent of the demand for platinum is in a declining industry. In jewelry, people prefer gold.
And in a recession, which I believe is here, what is the demand for jewelry?
Gold Fundamentals
J.P. Morgan: “Gold is money, nothing else.”
Gold has industrial uses, but those uses are trivial.
You can claim gold is not money, but central banks hold gold, not silver, not platinum. Why?
Gold’s Strongest Move In a Year Was When the Dollar Was Rising
Gold vs the US Dollar
Regarding technical patterns, the top half of the above chart is the best long-term cup-and-handle formation in history. It broke in the expected way, and that is up.
Gold is now at an all time high of 2,650.
On April 11, 2024, I noted Gold’s Strongest Move In a Year Was When the Dollar Was Rising
Gold and the US dollar are not as inversely correlated as widely believed. Sometimes gold and the dollar move strongly in the same direction.
For discussion of misconceptions about gold vs the dollar, please click on the above link.
When Does Gold Do Best?
In general, gold is a poor inflation hedge. The best example is gold fell from$850 to $250 per ounce with inflation every step of the way.
In the mid-to-late 1990s, everyone thought “The Maestro”, Alan Greenspan, had everything under control. In such periods, gold is among the worst assets to hold.
Gold is best viewed not as a hedge against inflation but a hedge against credit stress, stagflation, and faith in central banks.
Dear Jerome Powell, Is Everything Under Control?
On May 17, 2024, I asked Dear Jerome Powell, Is Everything Under Control?
If you think the Fed is going to get things under control, demand for catalytic converters is about to take off, and a recession won’t hinder demand for jewelry, then platinum is a great bet.
But if you think that the Fed does not have things under control, and won’t get them under control, even in a recession, then gold is a better bet.
A side effect of the US$ and gold price rising together is that gold priced in other currencies is soaring. Back in 2011 when gold hit its high, the Aussie dollar was about 10% stronger than the US$ – today, its about a third weaker, resulting in a local gold price of $3,920. Some of our local miners like Ramelius are on 60% margins….
My understanding is that palladium demand is more associated with catalytic converters than platinum, and that platinum has more broad industrial uses, but the increase in electronics vehicles certainly does not help platinum’s demand. The one hail-Mary hope for platinum has been Japanese investment in hydrogen engines, which reportedly would use a great deal of platinum. The hopes for silver, with increased solar and, potentially, Samsung battery technology, seem more plausible.
I subscribed to Graddhy’s services for a couple of years. Nice guy, but a bit of a perma-bull on the metals, although he’d deny that.
gold is the money of bankers silver is the money of businessmen
Metals are the money of miners.
Does anyone know of just ONE central bank holding significant amounts of platinum?
Maybe South Africa, which mines more than 50% of the world’s platinum. However, 50% of those mines are uneconomic.
Gold is universal money. The US dollar is not universal money. When the dollar is likely to collapse you buy gold. That is what is happening.
“It reportedly marks the latest precious metal that Costco has offered after gold bars and silver coins.”
https://www.foxbusiness.com/retail/costco-reportedly-selling-new-precious-metal-platinum
Costco selling gold might be the equivalent of the magazine cover indicator for gold.
On Mon Oct 7 Bibi might seek revenge. Since the Ayatollah tried to hit Dimona Israel
might hit Iran’s nuclear facilities, not oil facilities. If he wouldn’t Iran will will be able to threaten Israel, the ME, Europe and the US. Destroying the Iranian regime might be Biden’s legacy
Nonsense talker
Let’s hope!
Neither gold nor platinum are wealth producing assets. Gold is a commodity for the electronics industry. Platinum is a commodity for the auto emissions catalyst industry and for electric hydrogen generation. Prices will oscillate with supply and demand. Buy the one that satisfies your vanity. Buy something else to create wealth.
Gold is money
“Buy something else to create wealth.”
Wealth is created by DOING something. Not by buying something.
The only thing buying something does wrt wealth; is redistribute wealth which someone else created. By DOING something.
I’m aware that idiot cultists hard-indoctrinated into the currently fashionable-among-retards financialization cult; who are all invariably too flat out stupid to ever DO anything wealth creating; love to be told that stupid little them going shopping performs some sort of useful economic function. But they only believe that because they’re idiots. Not because any of their blind, uncritical, illogical and illiterate beliefs have ever had anything in common with neither reality nor logic.
I agree. Work, save, and invest to create wealth. You can save enough to invest in capital tools that help other people create wealth. That is what you do when you invest in a wealth creating corporation in the stock market. The corporation and their employees use your capital tools to create wealth and you share in the wealth created.
“That is what you do when you invest in a wealth creating corporation in the stock market.”
Not when what “drives” stockmarket appreciation is almost entirely central bank printing.
All so called “investing” (in reality just _consuming_ nonsensical “advice” wrt consuming fully randomized “stock” handles) then does, is
1)align you with the money printer. So you end up more biased towards falling for their “save” the (always kleptocratic and totalitarian..) “system” silliness.
2)Provide you with the illusion that you have “created some wealth” just because your randomly picked stock has been printed into carrying a higher price. Such that you then; feeling wealthier; consume more. Without any real wealth actually having been created. IOW: Exactly what has been going on since 1971: Massively increased consumption. All on the back of little to no; or perhaps even negative; underlying real wealth creation. Only the illusion of such, provided solely by unconstrained printing.
With the real result being: Almost all capital built up pre ’71, has now been squandered and consumed. By people who have been handed the fully unsupported illusion that there is new wealth created, despite there in reality being none: Roads are falling down. Housing stock decayed. Industrial capital gone. Schools / human capital darned near no longer functioning at all. Hardly any available health care left at all. Increasingly even food is becoming scarce enough to be unaffordable…. etc.,etc. All while the dupes keep repeating the trivially obvious nonsense that “we” are somehow “generating wealth”, just because Zimbabwe like printing manages to levitate some fresh-print-benefitting-children’s-playground named the “Stock Market.”
In Jan 1980 Gold reached $873. In Jan 2008 Gold breached it for the first time
after 28 years. Gold was backing up for almost a year until Oct 2008. After the Fed raided people’s bank accounts Gold popped up to $1917 in Aug 2011 while the Dow
plunged under 2000 high. During the Dow rise above Oct 2007 ==> Gold plunged until Dec 2015 low, while the Dow was in a trading range for two years.
Brigadier general Ismail Qaani, Iran revolution Guard Quds brigade who replaced general Suleimani,might have been killed in Beirut along with Hezbollah new boss who replaced Nasrallah.
This is more a general popularity contest than anything else. Gold has 5000 years of history, and people worldwide still believe that gold is GOLD. Silver is a close second. In the darkness in the back of the closet is Platinum and Palladium (what are they?) If Kim K. wrote articles about how cool gold was, you’d see more people buying it and the prices going up. Platinum is a hair conditioner. Things are worth what other people think they are worth, and how much bragging you can do with close friends about what you have. Same reason people buy Teslas, even tho they are not very practical. Life is a popularity contest.
Since Oct 2023 Gold followed SPX footsteps
You are looking at gold the wrong way.
I’m sticking with physical taconite.
Even today, Amex Platinum is a higher tier card than Amex Gold. I think credit card companies need to rebrand their cards so Gold is at a higher tier than Platinum. If you own platinum as an investment, I have a bridge to sell you.
Platinum is 20x rarer than gold. It’s primary source is Russia or South Africa
But it’s NOT monetary nor held by Central banks as a tier 1 asset BIG difference
When will gold fall back to $1600 level?
How to bet on gold price declining?
https://www.perplexity.ai/search/how-to-bet-on-gold-price-decli-lb81K90YSayxOdDCBpuwvw#0
How about never
Yep, about never. The world is crashing. The world understands gold.
Gold will continue to drift sideways, with ups and downs, until SHTF. Then, all bets are off on the upside. A major decline to prices like $1600 /oz would take a monumental shift in economic/political thinking. Still, the question is when?
When the US Federal Deficit is $0 at the end of each financial year. Alternatively, when gold is created by a cost-effective process..
When Harris/Walz brings lasting peace and prosperity to the world then gold will tumble.
Admittedly this goes back, but reading Mish and FOFOA back a while had me move some 5-10% of excess funds from a 401K into physical and a self-directed IRA (at Mish’s recommendation), and I don’t regret it at all at this point.
Fun readying FOFOA, too.
As was said then, and as is said below, Central Banks hold gold, so don’t tell me it’s outdated in a world of fiat as your insurance policy.
Governments hold gold. Billionaires hold gold. In today’s world which will implode there is every reason to hold gold.
Central banks are also very foolish, as evidenced by them continuously debasing the money and savings of the citizens of the country theyre supposed to be serving. So CBs holding gold doesn’t legitimize its current bubble market price.
They don’t serve the citizens. They serve the billionaires and elites. The mission statement of any central bank is nonsense.
I own both metals, but I view gold as a store of wealth (and to a lesser extent, investment) and platinum as a speculation.
Gold is very likely to outperform platinum because of rising demand for the former as monetary asset. It is widely known that BIS reclassification in 2023 as a Tier-1 asset, along with cash and Treasuries has driven Central Bank demand. Gold is also the second most widely held reserve currency after the US dollar, displacing the Euro in UBS’ most recent report.
What isn’t generally appreciated is that first tier banks such as UBS and Goldman Sachs have begun to recommend up to a 5% allocation to gold by their institutional clients, such as pension plans and insurance companies. A 5% allocation would be nearly 10 times the overall level of gold’s percentage of global assets. Its likely use as a trade settlement currency by BRICS nations will give further impetus to demand for physical gold.
Platinum has some factors in its favor, but not enough to outperform gold. It is up to 30 times rarer than gold and is primarily sourced from relatively few mines in Russia and South Africa. Electrification of transportation and purchases of EVs are likely to progress more slowly than expected just a few months ago, which should increase overall demand for ICE and hybrid vehicles as a % of the total fleet. If hydrogen ever takes off as a fuel, fuel cells could increase demand further.
Goldman Sachs first tier? Hahaha. Didnt they get bailed out for making dumb bets? Yeah, I believe gold has some value but not at the bubble price of today. Sounds like another financial industry wealth effect ploy, make people think theyre rich, same as with housing and bitcoin. The nearly everything bubble will eventually end.
The most interesting thing is that Platinum as a metal is actually something like 10x scarcer than Gold and yet Gold has a much higher price (note, it wasn’t always like this, once Platinum was more expensive than Gold).
The fact the price is inverted (the more abundant material costs more) is one of the reasons why when I see the Silver bulls claiming the Silver price should rise simply because it’s out of balance to the Silver/Gold scarcity I laugh because Platinum should then also go up on the order of 20x.
The price of Silver/Gold/Platinum is an excellent reminder that demand is much more important in determining price than scarcity. It’s something all the Bitcoin enthusiasts would do well to understand when they claim Bitcoin should go to 100K or 1 million simply because it’s scarce.
Excellent point Tim, great comment.
I like to look at data so I wanted to know what how gold has climbed from say April 2013 to today. Gold was at $1450 back then and now it’s $2650 an impressive run up of 83%, wow!
But I also took a look at something else, like Apple stock which was trading at a lowly $21/share. Today it’s at $226 or a whopping 1300% in just capital appreciation alone.
During that time frame there was far more demand for iPhones and other goods & services from Apple than there was for gold.
And if you’re wondering why I picked April 2013…..
https://mishtalk.com/economics/marc-faber-i-love-the-fact-that-gold-is-finally-breaking-down/
I love trips down memory lane.
Platinum. Palladium, mechanics creeper and a reciprocating saw.
Modern governments have long done their best to suppress the price of gold and bolster the position of the dollar as a pure fiat reserve currency, so often during the post-WW II Bretton Woods period it did not reflect then current inflation. Large paper gold markets were created which were subject to deflationary manipulation, and there was a constant propaganda against gold. Keynes and other technocrats hated the gold standard which constrained technocratic dreams of economic management of money and the economy. They called gold a “barbarous relic.” Of course, we abused our “exorbitant privilege” and ran the printing press.
Recently, the use of sanctions against Russia has caused many central banks to worry about the security of their reserve currency holdings and turn to purchase of physical gold.
I doubt the price of platinum will track that of gold. While both are used in jewelry, the real driver of the current price gains is the monetary demand for gold by other nations as the American empire fades.
There is a large literature on this subject, it is clear enough that huge games are being played in the gold and silver markets — the power of keyboard digits. Concentration in silver positions on COMEX is far above permitted levels but the rules are not enforced. The COMEX contracts in these metals for that matter were established only shortly after gold ownership became legal in the US again — there is a leaked embassy cable that indicates why. Americans have forgotten what gold is but natives of other countries have not — the bankers have been at this for 100 years now and there is no.living memory here any more. The dollar has lost 98% of its purchasing power since 1913 while the price of a house in the US is about where it was in 1890 if you price in gold. Finally: no fiat currency has ever survived historically, they always go to zero value. They keep the name sometimes, but not the purchasing power — the ruble of today e.g. has been devalued by quadrillions compared to late 1800s — it has died a number of times and been replaced without changing the name.
if one is honest about actual after tax(no one pays taxes on gold profits), after confiscation of real estate, stocks, bonds and all sorts of assets like autos and horses and RRs……….over the past 100 and 200 and 500 years and 5000 years, gold has performed better than any other asset class on planet earth, by a long shot. especially when you include the entire globe and understand even a fundamental education on world history of humanity…………….there is nothing that comes even remotely close. the vast majority of people in USA(besides folks from vietnam and russia and nazi europe….) past 80 years have no concept what works in really bad times. a pocket filled with a few gold coins can be the difference between life and death and a new life under a new regime. the only amerikans i know of that get this concept, are my old pals in charleston SC, my home for a delightful decade. , whose great grandpapies sold confederate dollars and bought gold before the end of the lost cause of recent unpleasantness…… they were the famiiles that held onto their plantation properties and downtown mansions.
We love Charleston and its resident locals are the Friendliest to us compared to the entire USA as we have Traveled by RV in 48 states.
Agreed, Mike, seeing gold as wealth storage during the breakdown of the systems. Arguably the spinning plates of volatility and financialization are a bit wobbly?
Hybrid vehicles take 2x the Platinum needed for ICE. Demand for hybrid vehicles is increasing and is likely to continue to do so.
And you are completely incorrect on gold. You fail to focus on the long timeframe. I could give you a dozen examples without even thinking. I could probably find a hundred with a bit of effort.
I’ll give you two.
Priced in gold, houses are significantly less expensive than they were in 1975.
Prices in gold, a custom toga, tunic, and a new pair of sandals for his daughters wedding for a citizen of Rome took about an ounce. That same ounce today will buy a man a decent custom suit, a shirt, and a pair of Allen Edmunds.
I’d say that’s tracking inflation pretty well.
Nope. Hybrids use less platinum than ICE because their catalytic converters use a combination of platinum and palladium, due to the reduced load on the converter as the engine gets an assist from the electric motor.
Electric cars use none.
As more EVs and hybrids are sold, the demand for platinum will decline.
In addition, diesel cars use the most platinum and their sales are declining even faster than gasoline cars.
That could boost PGM demand as about 10-15% more platinum metals are needed in PHEVs than petrol vehicles because engine pollution is higher when starting a cold engine, Swarts said. Petrol engines in hybrids, especially PHEVs, are infrequently used and so often start cold. per google