Platinum is expected to outperform gold next year on expectations consumption will accelerate as the global economy rebounds and as supply lags behind demand, according to UBS AG and Standard Chartered Plc.
Platinum traded at about 1.2319 times the price of gold yesterday, Bloomberg calculations show.
The platinum-gold ratio remains “well below” its historical range of 1.5 to 2, Credit Suisse Group said.
“Platinum is currently trading at a modest premium to gold, compared to recent history, and therefore seems attractive as a relative value play,” Standard Chartered analysts led by Helen Henton, wrote in a report e-mailed yesterday.
Platinum has soared 61 percent this year, rebounding from a 39 percent slump last year, after investors bought precious metals as an alternative to a declining dollar.
The Dollar Index has tumbled 8.4 percent this year, boosting platinum held in ETF Securities Ltd’s exchange-traded commodities products to a record on Nov. 27.
The metal for immediate delivery touched US$1,510.30 an ounce on Wednesday, the highest level since Aug. 14 last year, and was down 0.3 percent at US$1,498 by 3:22pm in Singapore. Gold, headed for a ninth annual gain, has surged 38 percent this year, reaching a record US$1,226.55 an ounce yesterday.
Platinum briefly traded at parity with gold last December for the first time in 12 years as the global recession curbed demand. Supply will outpace demand by 140,000 ounces this year, compared with a shortfall of 240,000 ounces last year, after a 33 percent drop in demand from autocatalyst makers, Johnson Matthey Plc said.
The small surplus this year should turn into a deficit on higher industrial consumption and a higher base in jewelry demand, said Dominic Schnider, head of commodities research at UBS AG’s Wealth Management Research.
“We expect platinum to be the outperformer of the sector,” Schnider said yesterday.
He forecasts platinum to average US$1,550 an ounce next year, with prices expected to “top out” around US$1,600 an ounce. Platinum has averaged about US$1,191.94 an ounce this year.
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