Following several weeks of sustained gains platinum prices are on the point of achieving parity with those of rival precious metal gold.
Reuters reports that a two-week sustained rally has taken platinum’s discount to gold to its thinnest extent in nine months, with the spread between the precious metal peers narrowing to $31.30/oz.
Despite the fact that platinum possesses a broad variety of industrial uses in addition to its status as a precious metal, it has lagged behind gold of late due to the predilection for the latter shown by investors hoping to hedge against inflation during troubled economic times.
Contrary to gold platinum rises when economic prospects brighten, as over half of all platinum is used for industrial purposes. The improving outlook for China and Europe could provide a major boost for gold’s often overlooked peer in 2013.
Analysts point out, however, that platinum is unlikely to regain its traditional premium over gold due to its high cost of production and the uncertain nature of the global economy’s recovery.
The average cost of production for platinum currently stands at around $1,600/oz, compared to $1,200/oz for gold.