2 replies to this topic

[analyste de Boston]

I've got a blog now!  Admittedly, it's narrowly focused: the historical price of the PMGs (Platinum Metals Group), inflation adjusted.  My premise is that Platinum has been a superior to Gold, historically, as an inflation hedge: so we need to see it's price record.

I recently emailed Johnson & Matthey (the 200 year old English firm that basically controlled the Platinum market) and confirmed there's no spot price history for these noble metals.  So I started building the data record myself, year-by-year from 1800 to be able to see the true long term lows, highs and average price ranges.

For example, the 1822 Price of Palladium would be worth over USD $10,000. inflation-adjusted to 2009 Dollars with John Williams methodology.   That calc goes that the bottom of each entry (maybe that's no obvious enough?)

I haven't put up any charts yet, and I'm still finding & compiling data (evidence.)

[CarryOnMyWaywardSon]

So why isn't platinum trading at multiples to gold?  Is it a bargain in comparison to Au?

[analyste de Boston]

CarryOnMyWaywardSon, on Apr 26 2010, 02:28 PM, said:

So why isn't platinum trading at multiples to gold?  Is it a bargain in comparison to Au?

HELL, YES.  

It's 30x rarer, to start.  And Platinum traded 3-4x POG for much of the 20th C.

But I'm trying to ascertain the looooooong term inflation adjusted price average, to see where a reasonable 40% discount sits.  I suppose we're (historically) still in Platinum's CHEAP! territory, but I cannot prove that. Yet.  

I do know the quick-n-dirty avg. real inflation-adjusted, long term Gold price (100-year, 75-yr, 50-yr, 25-yr) is ~ USD $1,650./oz.

25yr: real inflation-adjusted POG @ $2,020.
50yr: real inflation-adjusted POG @ $737.
75yr: real inflation-adjusted POG @ $1,532.
100yr: real inflation-adjusted POG @ $2,292.  


Whether or not Platinum will trade at 3-4x POG (or Palladium will trade at ~ $1,500./oz) in the near future isn't my guess.  This is only one way of seeing Price, but if we don't even know the history, we're legally blind.   I think it's worth knowing, at least to understand long term trend.