With a front-running style, favored Precious Gold takes the lead by a head December 15th, 2008, 5:30 Eastern, with Price of Platinum coming in second at a price of $835 per ounce–$2 below gold. The prelude to this historical event was Friday, December 12th, when platinum and gold collided within a $1 spread of each other. Platinum still managed to take the lead last Friday–but not so today.
It’s nothing short of an exhilarating horse race.
What finally put platinum trailing in the sand was unexpected: what else but the failing American auto-making industry. Platinum sank again with news of the U.S. senate’s rejection of the auto “bail out”. This made the difference since the auto-industry utilizes platinum in catalytic converters–and not just a tad. Approx. half of annual platinum demand comes from the auto-sector, which used 905,000 ounces of platinum in 2006!
Gold is clearly the winner over platinum in 2008, since the gold price performed at a 21% decrease vs. platinum’s 65% decline since March, 2008.
For those of you in search of your platinum diamond engagement ring this season, this does not mean that platinum rings will cost the same as gold rings, but now is the perfect time to buy that platinum ring, because platinum prices will be considerably lower in 2009 and possibly to the end of this decade unless the economy rebounds quicker than we anticipated, the auto industry does not substitute another metal for platinum (such as gold) in its catalytic converters, and platinum miners cut production in years to come, thereby reducing supply and effecting demand for the precious metal.
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Category: Gold Prices