Gold and platinum are two of the most widely known and utilized precious metals. Both have value in their use in jewelry and industrial applications, whether in catalytic converters (platinum) or electronics (gold).
Platinum, a silver-colored metal, is durable and dense metal commonly used in manufacturing of car and plane parts. Gold is a yellowish metal that is popularly used to create jewelry. Common phrases like “the gold standard” and a record going platinum may have new investors wondering: is platinum a better investment than gold?
IS PLATINUM A BETTER INVESTMENT THAN GOLD?
In general, platinum is not a better investment than gold. Gold is more stable, more easily mined, and does not fluctuate in price as much as platinum. And gold’s value is considerably more than platinum.
GOLD IS MORE STABLE
Gold is more steadily in demand than platinum. The industries that gold is most commonly used in—jewelry, electrical, and medical—rely less on economic factors to influence its demand. In fact, in times of economic downturn, gold’s value often increases!
The value of platinum, however, is directly tied to manufacturing, specifically in the creation of catalytic converters. When cars are being produced at a slower rate because of a recession, platinum’s value goes down because the demand is not high.
PLATINUM’S PRICE FLUCTUATES MORE
Along those same lines, platinum’s price fluctuates more than gold. Because its demand goes up and down, so does its price. While platinum is often worth more than gold, it is also more likely to decrease in value at a moment’s notice.
More recently, however, gold has been priced higher than platinum. Most well-informed investors look at the price differences between the two metals in order to understand trends. This price difference is typically conveyed in terms of a ratio. So if the ratio is greater than 1, platinum is cheaper than gold. But if the ratio is less than 1, platinum is more expensive than gold.
GOLD IS EASIER TO MINE IN MORE PLACES
Gold can be found on nearly every corner of the world; countries all around the world mine gold. Gold is easy to mine because it is located near the earth’s surface. Platinum is found in fewer places—primarily South Africa—
Some researchers say that more platinum is present in the earth than gold, but that it’s just much deeper and harder to locate than gold. However, other research contradicts that assertion, instead citing that platinum is 30 times rarer than gold. Either way, platinum is much harder to mine than gold, leading to gold’s higher utility and practicality.
GOLD HAS HISTORIC VALUE AS CURRENCY
Gold has been used as currency for centuries. Many people today invest in gold as a supplement to traditional stocks and bonds because gold can be used in place of fiat currency in the event of an economic crisis. Platinum is not able to be used in quite the same way. While it does have value that lies outside of the stock market, it is not as easily liquidated as gold.
SHOULD YOU PURCHASE PLATINUM?
The answer depends on where you are in your investing journey. In general, it can be advantageous to have a varied precious metal portfolio. So if that is your goal, then platinum is a good choice. If you’re just starting out with purchasing precious metals, gold and silver will be your safest bet. They have proven their stability after centuries of use as both currency and a commodity. They also have a stable market to bring in valuable returns.
Real Time Precious Metals Data Below