Re: Platinum is now below the price of gold

You should be familiar with the principle of the pendulum - at first commodity prices swung too far one way as a result of a speculative bubble, now the bubble has collapsed and the pendulum has swung too far in the opposite direction. The pendulum never stops swinging but its oscillations will slow down unless there is some new event that gives impulse to it in one direction or the other. It is in the nature of speculative markets to overreact. Except for the fact that we are now in some sort of deflationary cycle whose end is not clearly in sight, now would actually be a good time to buy Rhodium.

Look at this graph:

http://www.kitco.com/LFgif/rh1825lnb.gif

You can see a gradual increase in Rhodium prices from 2003 to around the middle of 2005, which probably reflects long term trends in demand and supply as easily mined sources are depleted, etc.. If you follow the long term trend, Rhodium should probably be somewhere in the range of $3600/ounce today. But instead a bubble began growing around the middle of '05 and continued growing up to the middle of this year. It is the nature of bubbles that they grow gradually but "pop" very rapidly, so since June not only has Rhodium given up all its gains above where it "should" be, but it has gone far below.


"Frank Adam" <fajp@xxxxxxxxxxxxxxxxxxxxxxxx> wrote in message news:mb1dk4t277g191110179nts2ohmu4kbrhv@xxxxxxxxxx
On Mon, 15 Dec 2008 10:34:34 -0500, Moka Java <rtwatches@xxxxxxxxx>
wrote:

SWG wrote:
On 12 déc, 18:25, Moka Java <rtwatc...@xxxxxxxxx> wrote:
I don't think this has ever happened before. According to kitco.com,
as of this writing gold is at $824.50 and platinum is at $818. In March
'08 gold hit a high of about $1030 and platinum was over $2200.
Platinum is used in automotive catalytic converters and I understand
that the decline in auto sales will affect demand and price, but WOW!


Impressive! It should not last very long though, as the costs of
production of Pt is getting increasingly more on rarefying ore. The
dip in price is not only related to a slackening off in the car
industry, but also in the successive official depreciation of the
ruble and increased selling by the Russians, strapped for cash.

Yes, the Russian government has recently excused itself from being the
sole, monopolistic seller of Russian platinum. At it's current price
platinum is at or below it's mean cost of production. Several African
platinum producers are in the process of shutting down operations.

Now who can explain what happened to rhodium? $10,000+ an ounce in July
and now $1,075. http://66.38.218.33/charts/rhodium.html

Actually i'm still puzzled about what happened to oil. Even with the
OPEC interventions it fell by what, about 30% ?
Buggered if i understand all this stock stuff. I reckon there is a big
random number generator hidden in a deep bunker somewhere in an Amazon
jungle.

--

Regards, Frank

.

Relevant Pages

  • Re: Platinum is now below the price of gold
    ... the price at which Kitco will buy and Kitco will sell is very wide. ... Rhodium dropped $165 per oz. ... 80% of Rhodium production is used in catalytic converters for automobiles. ... I don't know if some stock of rhodium has "flooded" the market as Russian platinum is doing to that market. ...
    (alt.horology)
  • Re: Platinum is now below the price of gold
    ... I don't know if there was some "cornering" of the market when rhodium went up along with all the other commodities. ... I don't know if some stock of rhodium has "flooded" the market as Russian platinum is doing to that market. ... that the decline in auto sales will affect demand and price, ...
    (alt.horology)
  • Re: Platinum is now below the price of gold
    ... 80% of Rhodium production is used in catalytic converters for automobiles. ... Rhodium is not usually mined by itself but is a by-product of platinum or other metal mining. ... I don't know if some stock of rhodium has "flooded" the market as Russian platinum is doing to that market. ... that the decline in auto sales will affect demand and price, ...
    (alt.horology)
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