By Glenys Sim April 6 (Bloomberg) -- Gold’s ratios to platinum and palladium tumbled to the lowest level since before Lehman Brothers Holdings Inc. filed for bankruptcy in 2008, a sign that the global economic recovery may be gaining momentum. An ounce of gold bought as little as 0.6619 ounce of platinum late yesterday, the least in almost 19 months. The ratio averaged 0.8094 last year and the metals traded at parity in December 2008 for the first time since December 1996. One ounce of bullion bought 2.236 ounces of palladium late yesterday, the lowest amount since July 2008, compared with a high of 5.01 ounces in February 2009, according to Bloomberg calculations. Platinum and palladium are used mainly in catalytic converters, which curb pollution from automobiles. “Good economic numbers should be quite positive purely for the supply-demand forecast for catalytic converters, so the economic updraft is there,” Jonathan Barratt, managing director at Commodity Broking Services Pty, said from Sydney. “We’ve seen some phenomenal moves.” Platinum has climbed 16 percent this year and palladium has advanced 23 percent, outperforming gold’s 2.8 percent gain as investment and physical demand increased. Gold slid 0.3 percent to $1,128.20 an ounce at 10:59 a.m. in Singapore. Passenger-car sales in China rose 55 percent in February from a year earlier, while auto sales in the U.S. were the fastest since the 2009 “cash for clunkers” program as the industry rebounded from the worst recession since World War II. The launch of the ETFS Platinum and Palladium Trusts on the NYSE Arca stock exchange in January also boosted purchases. ETF Securities Ltd.’s holdings of platinum reached a record 707,662.1 ounces on Feb. 8, while its palladium assets reached a record 1.23 million ounces on March 30. Price Outlook Royal Bank of Scotland Group Plc last week raised its 2010 platinum target by 7 percent to $1,550 an ounce and palladium’s by 13 percent to $450 an ounce. Platinum has averaged $1,571.93 this year, while palladium has averaged $445.10. “The platinum group metals remain our preferred precious metals,” RBS analysts led by Nick Moore, wrote in a March 31 quarterly report. Still, both metals, along with the rest of the commodity complex, are likely to “pause for breath” for the rest of 2010, “limiting price upside from current levels, Moore said. Platinum for immediate delivery dropped 0.9 percent to $1,691 an ounce today, after touching $1,708, the highest price since Aug. 1, 2008. Palladium was little changed at $502.25 after reaching $512 an ounce yesterday, the highest level since March 17, 2008. “You have to be bullish on the Platinum Group Metals,” Barratt said. “We’re only at a fraction of the highs we have for palladium. At the moment it still looks good but I think it needs to have a bit of a rest.” Spot palladium climbed to a peak of $1,125 an ounce in January 2001. --Editors: Matthew Oakley, Jake Lloyd-Smith. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@Bloomberg.net

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