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Philip Newman, director at Metals Focus.

(Kitco News) – Higher gold prices will support platinum prices, this according to Philip Newman, director at Metals Focus.

Newman spoke Wednesday at the International Precious Metal Institute’s Auto Catalyst and Fuel Seminar in Atlanta, Georgia.

Platinum dropped 4% to US$895 ounce over the past 12 months. Over the same period, palladium shot up 48% to US$1,279 oz. Palladium benefits from more stringent emission standards. Palladium is better suited to the current generation of catalytic converters.

Despite platinum group metals being used predominantly for industrial applications, platinum is still a precious metal.

“There is a relationship between platinum and gold,” Newman said. “Yes, we have seen the discount reach record levels, and that has invited investor skepticism. We believe the relationship still holds, and that will be the main driver for the platinum price.”

Metals Focus said gold will test the US$1,400 oz level this year, which will pull platinum prices higher.