Gold’s Premium to Platinum Hits Record High

August 13, 2012 at 08:59


Gold was steady on Monday, as it tried to extend its winning streak into a seventh session with dimming prospects for global growth supporting expectations of more stimulus measures from central banks around the world.

Further monetary easing would likely boost inflation, driving investors to gold as it is seen as a good hedge against rising prices.

Data earlier on Monday showed Japan’s economic growth slowed much more than expected in the second quarter, after a string of figures on Friday suggested that China’s pro-growth measures have been insufficient.

“The sentiment (on gold) has gotten better in the past few days with investors focusing on central banks,” said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

Schnider said gold could test its 200-day moving average near $1,650 around the U.S. Federal Reserve symposium, slated to take place late this month in Jackson Hole, Wyoming, and expected to shed light on the central bank’s attitude towards further stimulus.

Spot gold could rise to $1,632 an ounce during the day,  gold market analyst Wang Tao said.

Hedge funds and money managers cut their net long position in U.S. gold futures and options by 11 percent in the week to August 7, following a 35-percent surge in the previous week, data from the U.S. Commodity Futures Trading Commission showed.

Asia’s physical gold traders were also in a wait-and-see mode, waiting for prices to display a clear trend, dealers said.

Gold’s premium to platinum rose to an all-time high above $230 an ounce, as platinum remained under pressure from gloomy economic prospects.

Gold has been at an average $194 discount to platinum since January, 1985.

Prices of spot platinum, mainly used to produce autocatalyst and jewellery, traded nearly flat at $1,393.80, after falling for six weeks in a row.