Trading The Platinum-Gold Spread

  • Gold is trading at a $352 premium to Platinum.
  • Each $1.00 change in the spread price = $100.00
  • How to capture the trends in this spread.
  • The instruments we’re trading
  • Links to generate trades and monitor performance

Historical chart showing the difference between Platinum & Gold 25 November 1977 through 12 December 2017.

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Contracts Traded
Platinum futures are traded in 50 troy ounce contracts
Gold Futures 100 troy ounce contacts

Trade the contact delivery months with the highest volume.
Platinum Quotes & Volume  (Jan. 2018 has the highest volume symbol PLF18)
Gold Futures Quotes and Volume ( Dec. 2017 highest volume symbol GCZ17)

If you believe Gold will continue to gain on Platinum

  • Buy 1 Gold futures contact GCZ17 (long 100 troy ounces)
  • Sell 2 Platinum futures contracts PLF18 (short 100 troy ounces)

If you believe Platinum will gain on gold

  • Sell 1 Gold futures contract GCZ17 (short 100 troy ounces)
  • Buy 2 Platinum Futures contract PLF18 (long 100 troy ounces)

Historical chart showing the difference between Platinum & Gold 25 November 1977 through 12 December 2017.

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One simple way to determine the direction of this spread is using a Moving Average Exponential (9). I’m a long-term trader so I use the monthly,

  • If price action is above the red line buy 2 Platinum, sell 1 Gold contract
  • Below the red line Sell 2 Platinum, Buy 1 Gold contract
  • Each $1.00 change in the spread’s price = $100
  • Allow $0.75 to cover all bid/ask spreads and brokerage fees ($75)
  • Put up $25,000 per position, in order to lose your deposit, the spread
    would have to move against you by $250.00

To monitor this strategy use this chart to determine direction,  if price action is above the red line buy Platinum, sell Gold, below sell Platinum buy Gold.

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Currently you should be short Platinum, long Gold premium 301 to Gold

Use this 15-minute chart to monitor profit or loss, each $1.00 change in the spread equals $100.00. Current trade short Platinum, long Gold premium $301 to gold, current price $352 premium to gold or plus $5,100 per position.

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Exchange information on the Platinum/Gold spread

I’m looking forward to an exciting year and major market moves in metals.

Send us a message or  schedule an online review  to speak with a broker who’ll  answer all your questions and provide supporting links for additional information and/or verification.

Regards,
Peter Knight Advisor
Contact Information

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Asset Investment Management

Family Office, Advisors