Platinum: The elder cousin of gold & silver is poised for a comeback

Over the last two years I have been writing about rally in precious metals like gold and silver. You can read my views which were published on this platform here, here and here. I am not writing this to brag but to show how and why I told you that precious metals must find a place in your portfolio.

Now, there is yet another precious metal which looks like it should be a part of your portfolio. Among precious metals, platinum has long carried an aura of rarity and prestige. For much of the 20th century, platinum commanded a premium over gold, earning the moniker “rich man’s metal.” Similarly, against silver, platinum stood tall, with its relative value touching extraordinary highs. Yet, over the past decade, platinum has been humbled. It now trades at historic discounts to both gold and silver — a rare anomaly that could be setting up a once-in-a-generation opportunity.

Platinum vs Gold: Signs of a Bottom

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The Platinum-to-Gold ratio chart captures this dramatic reversal. From highs above 2.0 in the early 2000s, the ratio collapsed to a record low of ~0.27 in 2024, meaning one ounce of platinum was worth just a quarter of an ounce of gold.

Technically, however, a potential reversal is underway. The chart displays an inverse head-and-shoulders pattern, a classic sign of trend change, alongside attempts to break out of a long-term falling channel.

If this breakout sustains, the first resistance comes around 0.49, with longer-term potential to revisit parity (1.0) with gold. Fundamentally, the case is backed by tight supply from South Africa and Russia which are the largest producers of platinum. The renewed industrial demand from hydrogen fuel cells and green energy also works in favour of platinum. Gold will remain the ultimate safe-haven asset, but platinum may outperform it from today’s depressed base.

Platinum vs Silver: A Falling Wedge with Divergence

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The Platinum-to-Silver ratio tells a parallel story. Once at a lofty 150, the ratio has collapsed to near 30, suggesting silver has vastly outperformed platinum for years. The chart now shows a falling wedge formation near multi-decade lows, with an important twist — a bullish divergence on RSI. While the ratio made fresh lows, momentum indicators refused to confirm, signalling weakness in the downtrend and hinting at an inflection point.

Historically, the 30 level has acted as a strong floor for the ratio, and current price action suggests platinum is trying to carve out a bottom. A breakout from the wedge could trigger a sharp re-rating, with upside potential toward 50 and beyond. For long-term investors, this represents a powerful contrarian setup: platinum appears undervalued not only against gold but also against silver.

The Bigger Picture: Platinum’s Path Ahead

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Platinum has broken out of a descending triangle consolidation which runs from the 2008 highs. On a YTD basis it is trading with gains of more than 65% which is way above gold and silver which stand around 42% and 55% respectively. However, unlike gold and silver which are trading close to their all-time highs platinum is still trading 35% below its all-time high of US$ 2,300 per ounce. This indicates that the room for upside is far more than downside.

The combined message from all three charts is clear — platinum has rarely looked this cheap relative to its peers. Markets often over-correct, and platinum’s fall from grace over the last 15 years seems overextended. The triggers for a reversal are already in play: constrained mining supply, increased relevance in green technologies, and extreme undervaluation.

Of course, risks will prevail. Platinum is more cyclical than gold, tied closely to industrial demand. A slowdown in global growth or rapid EV adoption (reducing catalytic converter demand in Internal Combustion Engines) could cap upside in the near term. Investors must therefore be prepared for volatility.

Yet, from a risk-reward perspective, platinum’s deep discount makes it an attractive contrarian bet. Whether one looks at platinum relative to gold or silver, both lenses suggest the same conclusion: the long winter of underperformance may finally be ending.

For those willing to take a long-term view, platinum may once again reclaim its title as the elder cousin among precious metals — not necessarily surpassing gold in absolute terms, but closing the yawning gap that history suggests should not persist forever.

(The author is Founder & CEO, SAMCO Group)