Is Platinum An Astute Asset?

Gold and silver have taken center stage as the most prominent precious metals. However, other precious metals like platinum are certainly worth evaluating. Platinum is an excellent option for those who want to continue to diversify their precious metals portfolios. The metal has many industrial uses apart from its durability, brilliance, and beauty, making it perfect for jewelry. If you’ve ever considered purchasing platinum bullion or picking up platinum stocks, read below for more information on platinum as a potential asset.

What Is Platinum Used For?

Most of the platinum uses come from the automotive industry. With strict emissions requirements required by many countries, catalytic converters are used by nearly every traditional car manufacturer. These converters contain platinum as one of their catalysts to reduce the vehicles’ pollution. The rest of the platinum is used in jewelry and other industrial uses in the chemical, medical, and glass industries.

Platinum is also much more difficult to mine than gold. While most gold is found dozens of feet deep within the earth, it can often be found in surface areas like streams and even shorelines. Platinum, on the other hand, is located deep within the earth’s upper layer and is much more difficult to mine. Despite the higher degree of difficulty, platinum’s market price currently sits at about half of gold’s market price.

Characteristics

Because platinum has such an important use in industries, the price changes with the usefulness that different sectors can get from platinum. Since its value is tied so tightly to other industries, platinum is more volatile than other metals, especially gold. Gold has been used for thousands of years as a store of value; therefore, its role in society, even in modern societies, is well known and accepted. Newer metals, like platinum, don’t enjoy the same history as gold.

The opportunity with platinum will depend entirely on an individual’s ability to tolerate risk. While platinum is a precious metal, economic downturns may affect the price. When the consumption of industrial materials is less, the demand for platinum drops, and so does the price. In this way, platinum acts more as a commodity or speculative asset rather than a “safe haven.” Those interested in platinum must bear in mind that volatility and dependence on other market factors are not necessarily a bad thing since there’s also an opportunity for the price to increase. Platinum could therefore be a great way to balance a precious metals portfolio and act as a counterweight to gold’s conservative nature.

There are a few ways to take advantage of platinum for those who wish to do so. Platinum bullion and platinum coins are commonly available for purchase. Additionally, platinum stocks and ETFs may be purchased on the NYMEX.

If you have any questions about how to acquire bullion or coins, our experts are standing by ready to help you purchase the next addition to your precious metals portfolio.

**Prices stated in this article are subjective and not intended to project actual value. All precious metal prices are dependent on several factors.**