The U.S. economy cycles between periods of relatively strong growth and periods when rising inflation erodes earlier gains and stunts growth. One way to trade the shifts in market sentiment related to these swings is to trade platinum–gold futures spreads.

Even though platinum and gold are both precious metals, platinum is really more of an industrial metal than gold. The automotive industry uses platinum in catalytic converters. Platinum is used in petroleum refining and in the manufacture of a variety of chemicals and fuel cells. Further, it is used to make computer hard disks, spark plugs, and pollution control devices, among other goods.

Although gold does have some important industrial uses, it serves as an inflation hedge in the minds of many investors. These people turn to gold when paper assets don’t seem to offer a reasonable return relative to risk.