Platinum/Gold Spread: New Record Low

Back To the Dugout

The IMC blog entered a hypothetical speculative long position in October-December platinum/gold spread at the equivalent of -$239.40 (premium gold) on April 14th.  The position was liquidated at -$350.50 (premium gold) on June 27th, resulting in a loss of -$11,100.

Yesterday’s close was a new all-time low for the spread, while the ratio matched the January 20th multi-decade low of 0.74:1.  If a double bottom does not form right here, the ratio could soon reach the October 1982 record low of 0.69:1.

Platinum Gold ratio (nearest-futures) weekly

Platinum Gold ratio (nearest-futures) weekly

We are now back in the dugout and watching to see how this recent collapse plays out.  If the whole Brexit shakeup continues to weigh on the markets, the platinum/gold spread will likely suffer.  Once we get some more decisive price patterns, be it a double bottom in the ratio, a recovery in the spread, etc., we will come back up to the plate and take another swing at it.

Advertisements

4 thoughts on “Platinum/Gold Spread: New Record Low

  1. Well big $100 recovery from what may have been the spike low at around or so. Now key is to see if we can get back under the level. That would be a nice sign that perhaps the low has been made.

    Like

    • Gary,
      Agreed. The last few weeks have been crazy! The new low on June 27th made it look like the bounce off the June 17th low was a failure, but the surge over the last two weeks put the ball back in our court. Now the spread nearest-futures PL/GC spread is sitting right back on the 100-day MA. Us spread traders may need a chiropractor to treat us for whiplash…

      -JP

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s