The amount of platinum that buys an ounce of gold has reached a new peak level. The previous peak of 1.42 occurred in September last year, indicative of platinum’s decline in popularity, but now we've hit a new peak of 1.47 ounces of platinum per ounce of gold.

Platinum is currently worth £659.45 per ounce, while gold is currently £943.43 per ounce – a 31.11% difference in price between each metal. A decade ago platinum was at a similar level, but over those 10 years it has lost £360 per ounce.

The big factor influencing the decline of platinum is the diesel emissions scandal that hurt Volkswagen primarily, but several other car manufacturers in the process. Platinum is used in catalytic converters for diesel cars, so the loss of faith in manufacturers and their ability to adhere to pollution limits has meant that many people are shunning diesel cars in favour of petrol, electric, and hybrids. Palladium, used in catalytic converters for petrol cars, was the best performing precious metal of 2017, rising over 13% in value per ounce for the year.

It may be considered surprising that platinum’s value hasn’t fallen further, but mining has been deliberately limited to maintain a continued higher price. If the value were to fall too low then it would not be financially viable to continue mining it, which has resulted in limited output and a 275,000 ounce shortage of platinum per year (to date).

The record level for platinum against gold seems similar to the new record levels of silver to gold, and thus an argument could be inferred that like silver, platinum is currently undervalued. Traditionally platinum has been a higher price than gold, and the average ratio of gold to platinum is 0.75 – half of the current ratio almost – but the issue is that we currently have artificial sustenance of the platinum price. The previous run of platinum popularity was due to the big push by many governments to get the public to buy “less pollutive” diesel cars, which meant that for several years platinum was the top performing precious metal and in great demand. The current peak ratio in favour of gold is an exaggeration because of the anti-diesel efforts at present, but it does highlight a previous overvaluation of platinum while it was popular.