Platinum Overtaking Gold as Metal of Choice on Autos
Bloomberg.com
By Kim Kyoungwha and Nicholas Larkin
Jan. 25 (Bloomberg) -- Even after a record 57 percent rally last year, platinum is cheap relative to gold, signaling more gains as demand grows from carmakers and exchange-traded funds.
An ounce of platinum buys 1.41 ounces of gold, down 42 percent from the record 2.43 ounces in 2001 and 23 percent less than the 10-year average, data compiled by Bloomberg show. Automakers, the biggest buyers, will expand output 20 percent this year, said Evan Smith, who helps manage $2 billion at U.S. Global Investors. Hedge funds raised their bets 163 percent in 2009, about twice gold’s increase. ETF Securities Ltd. funds lifted holdings to a record 598,104 ounces.
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