Divergence between Platinum and Palladium

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Gwyde
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Divergence between Platinum and Palladium

From an update on the reference article: Platinum group metals, a story of scarcity and industrial needs

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After another failed recovery, Platinum permanently slid below $1100 on June 04 and further slid below $1000 since July 17. With Platinum plunging to a new post 2009 low at $931 on Sep 23, 2015, the Gold to Platinum ratio (GPR) is escalating, now peaking at 1.20.

The actual divergence between platinum and palladium is striking, with the latter rising, which seemingly also is provoking a short squeeze. The speculators' take on the falsification of emission test results for diesel engines by VW is to short platinum (used as catalysor for these engines) and go long palladium (only used as catalysor in gasoline engines).

The Palladium surges completely undoes the former Palladium slide, which brought the grey metal down to $530 on Aug 26, less than a month ago. Yesterday's surge adds to a completing recovery with Pd now at $648, the highest price level since the precious metal slide started aggravating by mid July.

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Gwyde
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Sluggish East-Asian economies keep the lid on precious metals

I studied in some more detail how the 'white' precious metal prices relate to 'the yellow one', which means analyzing the Gold to silver, gold to platinum and gold to palladium ratios. Even though gold slid below $1100 in August, the plunge for the other PM's was more catastrophic. Perhaps palladium is the first one to turn a corner now.  But is this more than a knee jerk reaction caused by the long Pd/Short Pt mania that got rooted among speculators?

The plunge of the white PM's is related to the sluggish outlook for the East-Asian economies. As such I chose this as the title for the analysis. Sluggish East-Asian economies keep the lid on precious metals

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Gwyde

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