LONDON (Commodity Online): Platinum could again regain its historical premium to gold, said Union Bank of Switzerland (UBS) in a research note.
According to UBS, the price difference fell below $100—still in gold’s favor—this week for the first time since late September.
“Does it keep going? If the illegal strike at Impala Platinum continues and the overall macro environment remains rather optimistic, then we wouldn’t rule out the price of platinum passing that of gold,” UBS added.
“This is particularly possible if gold retains its softer correlation with risk and lags if the risk rally extends. And in a medium- to long-term context, platinum, an important industrial commodity, should command a higher price than gold.”
Nevertheless, in the current economic environment, gold is deserving of its more expensive price tag. “Moreover, we think a return to parity would likely spawn considerable ratio trading--probably at platinum’s expense,” UBS concluded.
