Gold’s safe haven appeal drives a premium to Platinum

UNITED STATES January 21 2015 12:22 PM

 

NEW YORK (Scrap Register): Risk aversion and uncertainty across Europe have buoyed gold prices to September highs, driving the platinum-gold spread into a discount while palladium prices have plummeted, said Barclays in a snippet.

 

Disinvestment and concerns over China have scope to weigh on palladium in the near term while safe-haven buying could push gold higher; however, Barclays believes the underlying fundamentals look attractive for palladium and would view lows as a buying opportunity while gold is likely to lose steam.

 

The two stand-out precious metals have been gold and palladium. As the EURUSD has fallen to levels last seen in 2003, US 10y Treasuries have fallen to May 2013 lows, oil prices toppled below $50/bbl and S&P fallen to one-month lows, gold prices have rallied to September highs breaching $1260/oz, while palladium has tumbled below $750/oz to October lows. 

 

Gold is now trading at a premium to platinum, having toyed with the spread in late December and not having traded at a premium for consecutive sessions since April 2013. 

 

Although Barclays expects Q1 15 to be the strongest for gold in light of physical demand ahead of the Lunar New Year as well as the recent safe-haven buying, current prices are approaching toppy levels, in Barclays' view.

 

(This article is compiled by Vibin Antony on behalf of Scrap Register. Send in your suggestions and comments to editor@scrapregister.com)