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Pt to Au & Pt to Ag ratios and the PM trader

solarion

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Experienced precious metal stackers among us recognize that "selling" metal(exchanging for fiat) isn't necessarily a great idea financially, though sometimes necessary in a world dominated by fiat currency. Bills happen right? Proper management of financial resources can help avoid these icky moments in which one is forced by circumstance to exchange real money for fiat currency. The rest of the time, the goal of the PM stacker should be to increase the ounces of stacked metal in hand. To that end, I'd like to draw your attention to some potentially startling charts involving platinum.

The all time platinum to gold ratio chart:
1614470010118.png


All time platinum to silver ratio chart:

1614470194701.png


Is it time to swap some Au or Ag to Pt? Well that's what these charts indicate. If so which should be swapped? It's tough to imagine a more undervalued metal than silver, which is currently trading at just 54.1% of its all time high price set a whopping 41 years ago. Even still, a case can be made that it's silver and not gold that's the clear choice to swap for platinum at this time.

I arrived at this conclusion by simply comparing the distance above the all time low of the platinum / gold ratio vs the all time low of the platinum / silver ratio. Currently that maths is as such:

1614470898339.png


I ran these calculations twice due to the ridiculous premiums currently carried by silver bullion as a percentage of total cost, though paper prices also support the conclusion that silver is the metal to swap for platinum, and now is not too far from the best time to do so in the 31 years. The exact date to have done so, in hindsight, was August 29, 2020 when the platinum to silver ratio hit the lowest point in recent history(32.5392). Even still this seems a bit of a no brainer trade to me, and I'm going to look into doing as much at the best exchange rates I can find. Thoughts/comments are of course welcome, as the collected wisdom here is itself a precious resource.
 

917601

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Platinum in many circles is viewed as an industrial metal not worth taking a risk in purchasing. In the coin market, I see Platinum Proof Eagles for some years (2000, 2002) which have a low mintage of 9,000 bringing $2K, but the most common BU Platinum Eagles are a couple hundred over spot. There seems to be plenty available on Ebay, recent sales show $1400-$1600.
 

solarion

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Not sure why anyone's forking over so much when beautiful Austrian or Brit platinum can be had for a bit over $1300. The koala being my avatar just now was 1350. Pt Eagles are lovely, but like nearly everything else coming from the US mint, it's hideously overpriced. Platinum was in a sustained downtrend from April of 2011 to March of 2020...falling from 1865 to 700. That downtrend has now convincingly been broken and reversed. After getting "expensive", the auto industry swapped out for palladium to use in catalytic converters...and platinum has been virtually forgotten since.

Now palladium is over 2300 and platinum is at historically low prices relative to not just the other PGMs, but also gold and silver. Moving resources from what's done well to what's cheap is how I roll. There's very little platinum above ground, and the vast majority of what is above ground is installed in catalytic converters. It's a good time to swap some metal as the chart above shows.
 

917601

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Not sure why anyone's forking over so much when beautiful Austrian or Brit platinum can be had for a bit over $1300. The koala being my avatar just now was 1350. Pt Eagles are lovely, but like nearly everything else coming from the US mint, it's hideously overpriced. Platinum was in a sustained downtrend from April of 2011 to March of 2020...falling from 1865 to 700. That downtrend has now convincingly been broken and reversed. After getting "expensive", the auto industry swapped out for palladium to use in catalytic converters...and platinum has been virtually forgotten since.

Now palladium is over 2300 and platinum is at historically low prices relative to not just the other PGMs, but also gold and silver. Moving resources from what's done well to what's cheap is how I roll. There's very little platinum above ground, and the vast majority of what is above ground is installed in catalytic converters. It's a good time to swap some metal as the chart above shows.
I had mentioned the Pt to Pd swap, question remains will it swap back? Converters will need to be redesigned, how long? That said, a tremendous commodity bull is building. Diversification still my thoughts as Pt seems to be still widely available ( until one day suddenly it isn’t.)
 

solarion

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With platinum at 51% of palladium prices, I'd expect them to swap back...how long before it's widely known? I don't know, but I do know I want to stack well in advance of that. Certainly, if I'm an ICE based car builder, I'm securing a healthy supply of the stuff before I talk about swapping. The recent moves off the lows may indicate word is already getting out...or it could just be value shoppers recognizing opportunity. Either way we likely shan't have long to wait to find out and I rather stack what's historically cheap rather than what's fully priced or nearly so.