The gold/platinum ratio is the number of ounces of platinum needed to buy one ounce of gold. Platinum historically traded above gold, but that relationship has recently inverted, putting the ratio back in focus as an investment gauge.
Historical range:
Traditional range: 1:0.5 to 1:0.9 (platinum more expensive)
Modern average: about 1:1.0 to 1:1.5
Extreme high: above 1:2.0 (platinum undervalued)
Normal floor: below 1:0.8 (gold undervalued)
Investment strategy
Using the ratio:
Ratio above 1.5: Platinum relatively undervalued — an opportunity in platinum
Ratio below 0.8: Gold relatively undervalued — an opportunity in gold
Ratio 0.9–1.3: Normal range; diversification is sensible
Industrial demand: Platinum is sensitive to autocatalyst demand — factor in the shift to EVs