Gold Platinum Ratio

Discussion in 'Commodity Futures' started by UVXY20, Mar 6, 2025.

  1. UVXY20

    UVXY20

    Is this a useful metric, seem more like a trend following trade than a mean reversion spread trade? Have the fundamentals over time changed making the ratio less meaningful?
     
  2. maxinger

    maxinger

    I think you mean gold/platinum spread

    you have to plot (gold - A* platinum) on the chart.
    Then determine if the trend is trending or reversing or trendless.

    A is a constant where value of
    gold futures contract = A*platinum futures contract

    The same concept applies to other spreads
    (eg corn/soy spread ....)

    You also have to ask yourself why you are comparing gold and platinum.
    For corn/soy spread, it could be meaningful as the farmer grows corn or soy.
     
    Last edited: Mar 6, 2025
  3. UVXY20

    UVXY20

    Ratio is what I keep hearing.
     
  4. SunTrader

    SunTrader

    My preference to use ratio charts is to see which seems to be stronger/weaker but not to pairs trade them or look for mean reversion.