Platinum price dips to three-month low

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Soft industrial markets put gold-platinum ratio at 1.11.

The platinum price has dipped since the beginning of the month as weakness in the industrial sectors that use the precious metal drive down prices.

Platinum is now trading at US$1,703 per oz after hitting a peak of US$1,842 on June 9. The price has been slowly descending since this high and is now at the lowest it has been since mid March when the price fell to US$1,689.

Demand for platinum is driven mainly by industrial sectors rather than jewellery design and the falling price has been attributed to a weakening in these other sectors, particularly in the US and China, and in Japan where the effects of the tsunami are still hitting car manufacturing in the country.

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Analysts have also said that there is a surplus of platinum compared to cheaper metal palladium which is a factor that is also keeping the price low.

The platinum-to-gold ratio has dropped substantially over the past six months and platinum now trades at about 1.11 times the price of gold. However, analysts have suggested that this could be short lived and that the ration could rise again to platinum trading at two times the price of gold as the economy recovers and the Japanese car trade gets back on its feet.

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