- Gasoline-powered vehicles usually use chemically similar, albeit far inferior, Palladium instead of Platinum, as Palladium was historically far cheaper than Platinum - anywhere from 1/2 to 1/5 of the cost - Now, as the Platinum price has collapses, Palladium is worth $120 more than platinum, setting up a highly likely market reversal for a huge increase in platinum demand in the face of Euro 6 compliant catalysts (required from September 2015) which has to use more Platinum per car to achieve the lower emissions requirements. Selective Catalytic Reduction 9SCR) systems also contain Platinum.
The more likely excuse for the fall in Platinum has been momentum trading on the paper exchanges in the face of a higher USD on the FX markets, coupled with falls in the South African Rand and weak base metal prices.
In the long erm, cheap prices will likely cause industrial users to use more Platinum, but the market is stuck in a 'sweet spot' of malaise for now, creating an interesting opportunity for the patient investor.
Historically, Platinum has been valued higher than Gold, but now is over $400 per oz cheaper, meaning that the Platinum-Gold ratio has now hit the most oversold picture ever recorded.
Technical Triple Bottom buying Opportunity?
We need to confirm patterns by breaking back through the $920 per oz trend line, but also and more more importantly we need to break the high of $1,200 which was the high proceeding major low to confirm we are indeed correct.
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