Platinum Touched Fresh 10-Year Lows on November 24



Platinum and palladium

Platinum closed 0.67% lower on Tuesday, November 24, 2015—the only precious metal that ended the day on a down note. Platinum settled at $841.70 an ounce, its lowest closing in almost ten years. It seems to be continuing its fall after the Volkswagen emissions scandal had shaken off some of its investors.

Palladium rose marginally on Tuesday, gaining 0.08% and closing at $542.30 an ounce. Palladium touched a low of $526 in November. The chart below illustrates the comparative price performance of platinum and palladium from August–November 2015.

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Cross-commodity rates

The cross-commodity rate with gold is an important ratio to consider when discussing platinum and palladium prices. The gold-platinum and gold-palladium ratios have been peaking as platinum and palladium have seen heavy losses compared to gold. The gold-platinum ratio stood at 1.270 on Tuesday, November 24, which means that it requires about 1.27 ounces of platinum to buy one ounce of gold. Similarly, the gold-palladium ratio reached 1.998 after peaking at 2.024 in November, meaning that it requires slightly more than two ounces of palladium to buy a single ounce of gold.

The retreating gold prices could not help these cross-commodity rates as platinum and palladium plunged. ETFs that have been affected by lower gold prices include the VanEck Vectors Gold Miners ETF (GDX) and the SPDR Gold Shares ETF (GLD). GDX and GLD have dropped 16.20% and 7.40%, respectively, on a 30-day trailing basis.

GDX’s fall could be due to the fall in prices of its component companies, including Aurico Gold (AUQ), Silver Wheaton Corp. (SLW), and Yamana Gold Inc. (AUY) These three companies have fallen significantly in the past month, and they comprise 8.70% of the VanEck Vectors Gold Miners ETF (GDX) portfolio.


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