Platinum: The older cousin of Gold & Silver is ready for a comeback

In the past two years I have written about rally in precious metals such as gold and silver. You can read my opinion that have been published here and here on this platform. I don’t write this to create, but to show how and why I told you that precious metals should find a place in your portfolio.

Now there is another precious metal that looks like it should be part of your portfolio. Under precious metals, Platinum has long worn an aura of rarity and prestige. For a large part of the 20th century, Platinum ordered a premium over gold and earned the name ‘Rich Man’s Metal’. Likewise, Platinum against Silver Lang stood with its relative value that touched extraordinary highlights. Yet Platinum has been humiliated over the past decade. It is now trading with historical discounts on both gold and silver-a rare deviation that can set up a one-off chance.

Platinum versus gold: signs of a bottom

The platinum to gold ratio card catches this dramatic reversal. From height above 2.0 in the early 2000s, the ratio collapsed into a record layer of ~ 0.27 in 2024, which means that an ounce of platinum was only worth a quarter of an ounce of gold.

Technically, however, a potential reversal is underway. The graph shows a reversed head and shoulder pattern, a classic sign of trend change, in addition to attempts to break from a long-lasting channel.

If this breakout persists, the first resistance comes around 0.49, with a long -term potential to visit parity (1.0) with gold. Fundamentally, the business is supported by a sleek supply from South Africa and Russia, the largest producers of platinum. The renewed industrial demand of hydrogen fuel cells and green energy also works for platinum. Gold remains the ultimate Safe-Haven assets, but Platina can perform better of today’s depressive basis.

Platinum vs Silver: a falling wedge with divergence

The Platinum-to-Silver ratio tells a parallel story. Once at an elevated 150, the ratio collapsed to almost 30, which suggests that silver surpassed enormously for years than platinum. The graph now shows a falling wig formation near Multi-Decennium Lows, with an important turn-a bullish divergence on RSI. While the ratio made new lows, momentum indicators refused to confirm, whereby the weakness was indicated in the downward trend and hints at a bending point.

Historically, the 30 level has acted as a strong floor for the ratio, and the current price action suggests that Platinum is trying to cut a bottom. An outbreak of the wedge can cause a sharp re-rating, with upward potential to 50 and then. For long -term investors, this represents a powerful contrary attitude: Platinum does not only seem undervalued against gold, but also against silver.

The bigger picture: The Path of Platinum for us

Platinum is broken from a falling triangle consolidation that runs from the highlights of 2008. On a YTD basis, it is traded with a profit of more than 65%, which is far above gold and silver that are around 42% and 55% respectively. In contrast to gold and silver that are traded close to their platinum of all time, however, 35% is still traded below the all time of US $ 2,300 per ounce. This indicates that the space for the top is much more than disadvantage.

The combined message of all three graphs is clear – Platinum has rarely looked so cheap compared to his colleagues. Markets often correct too much and the fall of Platinum from the grace in the past 15 years seems overloaded. The triggers for a reversal are already in the game: limited mining supply, increased relevance in green technologies and extreme undervaluation.

Of course, risks will prevail. Platinum is more cyclical than gold, closely linked to industrial demand. A delay in global growth or rapid EV acceptance (reducing the demand of the catalytic converter in internal combustion engines) can turn it upside down in the short term. Investors must therefore be prepared for volatility.

But from a risk-remuneration perspective, the deep discount from Platinum makes it an attractive contrary bet. Whether you look at platinum compared to gold or silver, both lenses suggest the same conclusion: the long winter of underperformance can finally end.

For those who are willing to take a long-term image, Platinum can regain his title again if the older cousin is necessarily surpassing gold in absolute terms among precious metal, but the closing of the ugly gap that suggests history should not persist forever.

(The author is the founder and CEO, Samco Group)