Gold Prices Soar High to $1,737.79

For the first time in more than 2 years, gold has taken a higher position on the cost scale compared to platinum. Analysts feel that gold’s climb to the top can be consistent for a few months where as research shows that platinum regained its upper hand within a day by a small margin.

A precious metal analyst working with Barclays Capital says that the same macro concerns which weighed upon the industrial demand for platinum is now the driving force behind the gold investment demand resulting in sky high prices.

Major concerns about the economy worsened by debt issues in Europe and the U.S have investors turning towards gold for financial security. The Vice President of Scotia bank, Patricia Mohr, says that capitalists are thinking about holding gold as a currency as they feel the shiny yellow metal is of more value compared to platinum. These same economic worries have also led people to believe that demand for platinum as well as commercial materials such as crude oil and copper are falling drastically. Mohr says interest in gold might last for the next few months where as other industrial metals may not do well in the falling market.

Platinum can be considered as a precious metal but is often used more in the commercial industry as compared to gold. Its primary use is in the industrial sector where the metal is used as catalytic converters in motor vehicles. A senior metal analyst from Credit Agricole CIB says that most investors are leaning towards gold as they feel platinum can be outperformed by gold in a recessionary world where there is no growth or development.

On August 8^th, October-platinum was priced at $1,757.60 for an ounce where as October-gold was priced at $1,780.90 for an ounce on the New York Mercantile Exchange. Even though the premium rates for gold is steadily increasing, platinum has the chance of gaining an upper hand when the industrial cycle picks up again. Rohit Savant from CPM Group says that the market for industrial metals have supply issues such as mining difficulties in South Africa as well as labour issues due to recurring strikes. In the long run, these issues might favour the rise of premium prices of platinum.

Platinum is more expensive to mine and extract as compared to gold. Analysts feel that a growing environment which faces no risk of recession can help platinum trade at a premium to the gold price. The present situation in the market is acceptable as either the differences between the two metal prices will be seen in a few months or the gold premium prices will be steadily maintained.