(BFM Bourse) – Week after week, gold breaks new records. This is not the case for platinum, its rival among the precious metals.
An ounce of platinum was worth less than $920 this Tuesday, while for the same quantity of gold, you had to pay nearly $2,280, two and a half times more. Such a gap is unheard of on the markets. It must be said that since the beginning of the 2010s, the price trajectories of these two precious metals have diverged.
While gold, despite a few periods of decline, has almost continuously seen its value rise for more than half a century, for platinum this has no longer been the case since the 2008 financial crisis. And from 2012, the gap between the two prices has continued to widen.
How to explain it? Gold has benefited from ever-increasing demand in recent years. The rule applies to its physical uses in jewelry and industry but also because central banks, particularly Russian and Chinese, are hoarding more and more of it.
Gold fully plays its role as a safe haven in a period where uncertainty reigns. War in Ukraine, tensions in the Middle East, Chinese threats on Taiwan… The geopolitical context is pushing investors to bet on gold. Not to mention inflation which, although falling in the euro zone, continues to affect a record number of countries.
Declining demand from industry
Platinum is not in the same boat. It is certainly thirty times rarer than gold. Except that the price of a raw material does not only depend on supply but also on demand. And the main buyers of platinum need it less and less. Industrially, platinum is mainly used to produce catalytic converters.
However, with the rise of electric cars, fewer exhaust pipes are produced. Ultimately, the automobile industry will again need platinum for hydrogen cars, but this is not for now. As for central banks, they are not in the habit of storing platinum bars in their vaults.
There remains the particular case of jewelry stores which continue to sell platinum rings and bracelets at higher prices than equivalent gold models…
Certainly the production costs are not identical: gold melts at a significantly lower temperature, platinum is used almost pure and its very large mass means that at equivalent size it weighs heavier. But jewelers also benefit from the collective imagination which continues to place platinum above gold. Enough to allow them to generate more appreciable margins than with gold.
Pierre Kupferman
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