The Gold to Platinum Ratio Explained

20 Year Chart Gold Platinum Ratio

Historically, Platinum has traded at a premium to Gold.  In other words, one ounce of Platinum is normally more expensive than one ounce of Gold.  The median over the past 20 years is around 0.8 (which also aligns with the historical average), meaning Platinum has traded at a 20% premium to Gold (on average).

Currently the ratio stands at 1.17, and has traded above 1.35 as recently as 6 weeks ago.  The chart above illustrates that the ratio is falling, which means the price of Platinum has outperformed Gold in the short term.  If you are bullish precious metals in general (which I am), I highly recommend you take a look at investing in Platinum as opposed to Gold via the $PPLT (most liquid Platinum ETF).

If you are an aggressive trader, you can look to put on a pairs trade by buying Platinum ($PPLT) and shorting Gold ($GLD) until this ratio normalizes.

Good luck & God bless!