---
title: "European Natural Resources Fund: Platinum valuations are at historical lows, beware of the timeline for the restart of the interest rate hike cycle"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/270693921.md"
description: "Li Gangfeng, an analyst at the European Natural Resources Fund, pointed out that platinum valuations are at historical lows, reflecting its cheapness relative to silver. Platinum has risen by 120% this year, but historically, platinum could average over 60 ounces of silver, and now it can only be exchanged for 29 ounces. The market predicts that the Federal Reserve may raise interest rates in 2027, affecting the commodity bull market. Surveys show that 51% of respondents are optimistic about silver's performance in 2026"
datetime: "2025-12-24T06:21:02.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/news/270693921.md)
  - [en](https://longbridge.com/en/news/270693921.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/270693921.md)
---

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# European Natural Resources Fund: Platinum valuations are at historical lows, beware of the timeline for the restart of the interest rate hike cycle

According to the Zhitong Finance APP, Li Gangfeng, a special analyst for the European Natural Resources Fund, stated that by early December, the fund long positions for various metals have increased, among which the palladium contracts have finally restored net long positions after experiencing 164 weeks of net short positions (since October 23, 2022). Silver prices have surged, having risen 132% this year as of last Friday, and the gold-silver ratio has dropped from 90.84 to 64.6. However, the net long position for silver in U.S. futures has only increased by 66% since the beginning of the year, indicating that the rise is driven by physical demand. A survey conducted by a well-known metal trader showed that 51% of respondents believe silver will continue to outperform the market in 2026, 29% believe gold will lead again, 11% favor copper for 2026, and the remaining 10% are optimistic about platinum. Platinum has also risen by 120% this year, but historically, one ounce of platinum could be exchanged for over 60 ounces of silver, whereas recently one ounce of platinum can only be exchanged for 29 ounces of silver, which is at a historical low level, reflecting that platinum is currently the cheapest in valuation relative to silver.

Additionally, it is worth noting that some in the market have begun to bet that the Federal Reserve will start raising interest rates in 2027 (although the current probability is still very low). Li Gangfeng previously pointed out that this commodity bull market may be undermined by the U.S. interest rate hike cycle, making it very important.

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/b090f715d21dea1893b064a9adec2a39.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/81c5e706698d6a0a7c9a55af179b1af9.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Data Source: CFTC/LSEG Workspace

\*For comparison purposes, the metal equivalent of COMEX gold is divided by 10, and the metal equivalent of COMEX silver is divided by 100.

**Currently, the reference for Nymex palladium is very low.**

By early December, the fund long positions for various metals have increased, among which **the palladium contracts have finally restored net long positions after experiencing 164 weeks of net short positions (since October 23, 2022).**

**The net long position for gold in U.S. futures has decreased by 32% since the beginning of the year (with a cumulative increase of 35% in 2024).**

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/f6fd64707107c8427cb6a04c5d2eb6ed.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Data Source: CFTC/LSEG Workspace

**The net long position for silver in U.S. futures has increased by 66% since the beginning of the year (with a cumulative decrease of 1% in 2024).**

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/37fb451671e357a345a0b26d62998e29.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Data Source: CFTC/LSEG Workspace

**Funds in U.S. futures platinum have turned from negative to positive year-to-date (2024 cumulative decline of 152%)**

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/3af3d02d064a33cd75e394f884bff566.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Data Source: CFTC/LSEG Workspace

**Funds in U.S. futures copper have turned from negative to positive year-to-date (2024 cumulative decline of 132%)**

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/6009886a01ebaaf080562ed9efea39e2.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Data Source: CFTC/LSEG Workspace

In the past, capital controlled metal prices through the futures market. For example, since the global spread of the pandemic in 2020, the net long positions in U.S. precious metals futures have continuously declined, reflecting that funds intentionally prevented precious metals from rising. However, starting in the first quarter of this year, **futures funds began to close long positions for profit, yet gold prices remained high, indicating that physical demand far exceeds the leverage in the futures market.**

The CFTC weekly report on U.S. copper has been published since 2007. Since copper was in a bear market from 2008 to 2016, it is not surprising that U.S. copper futures have historically been mostly at net short levels. However, since 2020, due to the impact of the global pandemic on the supply side and mining operations, coupled with market expectations of strong demand for copper driven by AI and new technology developments, copper prices have risen, even reaching new historical highs.

**In addition to gold as a safe haven, international prices (not domestic prices) of crude oil (political risk) and materials monopolized by China (rare earths, antimony, tungsten, etc.) should theoretically be viewed positively.** Recently, the U.S. government not only invested in MP Materials but also signed a 10-year supply contract with them to purchase neodymium and praseodymium at a floor price nearly double that of China's price (USD 110 per kilogram). Stock prices surged on this news. Recently, there have been reports that the U.S. defense sector wants to acquire cobalt overseas.

**Subsequently, the U.S. government invested in Lithium America and Trilogy Metals, providing funding to Nova Minerals, which has led to significant increases in the stock prices of these companies.**

**Additionally, major gold producer Agnico Eagle announced the establishment of a new subsidiary with USD 130 million to invest in strategic resource-related projects.**

Li Gangfeng updated the important implications for short-term gold prices based on the gold price to gold mining stock indicators. Last week, the ratio of U.S. dollar gold prices to North American gold mining stocks showed a **decline**:

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/82aab1abb8fdba514667db2f60eba848.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Data source: LSEG Workspace

As of Friday (19th), the gold price/North American gold mining stock ratio was 12.473X, down 2.1% from 12.738X on the 12th, and has fallen 34.8% year-to-date. **This year, North American gold mining stocks have outperformed physical gold.** They have risen 16.5% cumulatively in 2024. In 2023, they accumulated a rise of 13.2% (2022: +6.4%), indicating that mining stocks have underperformed physical gold for at least three consecutive years, but this year, gold mining stocks have recovered some ground after a decline. **For historical comparison, before 2008, the ratio of the US dollar gold price to the North American gold mining stock index was only below 6 times.**

In fact, since 2009/2010, mining stocks have consistently lagged behind the commodities themselves, and in recent years, even oil/natural gas production companies have shown similar trends. The author believes one reason for this is the growing emphasis on environmental, social responsibility, and corporate governance (ESG) in the investment community. For example, in 2021, BlackRock committed to the UK Parliament not to invest in coal and oil production companies, and they are certainly not the only fund company that has pledged to invest only in companies and industries that place greater importance on ESG.

Li Gangfeng believes that tracking overseas gold mining stock prices is a relatively reliable forward-looking tool; if gold prices continue to rise but gold mining stocks experience a sharp decline, caution is warranted.

**Gold-Silver Ratio**

The gold-silver ratio is one of the indicators measuring market sentiment. Historically, the gold-silver ratio has operated at levels of approximately 16-125 times:

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/cc18217bccb7d58979440f85f5f4b6b2.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Data source: LSEG Workspace

Generally, the more panic in the market, the higher the gold-silver ratio. For instance, in 2020, due to the global spread of COVID-19, the gold-silver ratio once surged past the historical high of 120 times.

**Last Friday, the gold-silver ratio index was 64.62, down 6.9% month-on-month, with a year-to-date decline of 28.9%, and a cumulative rise of 13.0% in 2024. In 2023, it accumulated a rise of 9.1%.**

**The chance of a rate cut by the U.S. in March is nearly 50-50**

At the time of writing, the market believes that the Federal Reserve has only a 19.9% chance of cutting rates by 0.25% on January 28:

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/0728a4fc3a40620fa3d056f0b2759fb4.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Image source: LSEG Workspace

Currently, the market believes that the chance of a rate cut in March next year has risen from 44% two weeks ago to 47%; the chance of a rate cut in April has risen from 63% to the latest 64.6%. Therefore, the question that everyone needs to start thinking about is how investors should deploy during the window period between the Fed's rate cut in December and the potential rate cut in April next year It is also worth noting that some in the market have begun to bet that the Federal Reserve will start raising interest rates in 2027 (although the current probability is still low). Li Gangfeng previously pointed out that this commodity bull market may be wiped out by the U.S. interest rate hike cycle, so it is very important.

Silver prices have surged, rising 132% as of last Friday this year, and the gold-silver ratio has dropped from 90.84 to 64.6. However, the net long position in U.S. futures silver has only increased by 66% since the beginning of the year, indicating that the rise is driven by physical demand. A well-known metal trader conducted a survey with 352 retail investors responding, and the results showed that 51% of respondents believe silver will continue to outperform the market in 2026, 29% believe gold will lead again, 11% favor copper in 2026, and the remaining 10% favor platinum.

Speaking of platinum, it has also risen by 120% this year, **but historically, one ounce of platinum could be exchanged for over 60 ounces of silver, while recently one ounce of platinum can only be exchanged for 29 ounces of silver, which is at a historical low level, reflecting that platinum is currently the cheapest in history relative to silver.**

![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/cd52ea4d04eb05e0f5d8a3aaf6f5079b.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Image source: LSEG Workspace

Currently, the Federal Reserve has stopped its balance sheet reduction/QT in December this year and is re-buying $40 billion in bonds each month (expanding the balance sheet/QE).

Of course, the market is complex and ever-changing. If the Federal Reserve simultaneously lowers interest rates and reduces its balance sheet, the impact on asset prices will depend on the new chairman's speech for a clearer blueprint and expectations.

The biggest test in the next 12 to 24 months will be if the U.S. starts to lower interest rates, but inflationary pressures rise again, what direction will the Federal Reserve take?

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