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Kyle J. - August 26, 2021
8 Reasons Why You Should Be Investing In Platinum
We all know the significance of gold but there is one precious metal more valuable than gold, with a wider application of uses: platinum.
Platinum is relatively new compared to gold which has been mined for thousands of years. Platinum was first discovered in the 16th century, but the way to correctly process it wasn't discovered until nearly two centuries later. Since then, it has been used in numerous industries worldwide and the price has continued to grow.
If you're new to commodity investing or are curious about ways to start investing in platinum in general, keep reading for 8 of the benefits of investing in this rare metal.
Multi-Use
Considered one of the rarest metals in the world, there's no question as to why so many industries utilize and understand the value of platinum. It is utilized all over the world in the automotive, medical, jewelry, and even investment industries.
The computer you're reading this article on right now most likely has platinum built into it as it supports many electronic applications. Platinum can be used to connect pacemakers and is also used in the making of catalytic converters.
The uses of platinum in today's world truly are varied. Not only does platinum help power electric vehicles with zero emissions, but it can also help you store more of those valuable family photos on your hard drive.
A photo taken of a customers Gold and Platinum Subscription Crate circa 2017.
Market Demand
The market demand for platinum has grown significantly over the years.
The expectation for the growth in demand comparative to 2020 alone is just south of 7 million ounces. Multiple industries utilize platinum accounting for this high market demand, edging out what can be volatile investor sentiment. Rather, it relies on actual supply and demand and how the wider economy performs.
We'll cover which industries carry a sustained demand for this precious metal in the next section.
Material Value
One of the more straightforward benefits of investing in platinum is the material value it holds. While it does fluctuate based on supply and demand, platinum has increased from a modest price of around $200 per ounce in 1969 to well over $1,000 per ounce in today's market.
Whether you're investing in platinum coins or platinum bars, the value of your investment should pay off in the long run.
Vintage Engelhard Platinum Bar.
Malleable
The metal itself is a very malleable resource. Because of its soft property, it can easily get molded into various products used in motor vehicles, dental work, medical devices, and so on.
In addition, it is a metal resistant to corrosion or rust, making it a popular choice for the jewelry industry.
Heads and tails of an American Platinum Eagle as well as Platinum Philharmonics from Austria.
Supply Source
There are only two places in the world where platinum is primarily mined: South Africa and Russia. With more than half of the global platinum supply mined from these areas, any disruption to the supply chain can drive prices higher.
The amount of platinum on earth is finite. The rarity of this metal and the lack of access around the world makes it a precious investment.
Liquidity
An investment that can be turned into cash is considered liquid. High liquidity equals a higher chance of cash potential.
Gold is an extremely liquid commodity. Huge volumes of it get traded on the daily. Because platinum has low liquidity, it is more susceptible to swings in price. In theory, this makes it easier to buy low and sell high.
There is also less platinum in circulation than there is gold. If purchases of platinum rise, the low liquidity makes it easier for the price to rise with fewer buys.
Low-Risk
Investing in metals can be a low-risk investment as they hold intrinsic value. Because of the finite supply, holding any amount of precious metals in your portfolio can reduce the inherent volatility and risk that comes with investing.
Regardless of market volatility, owning physical metals means you own something with high economic value outside of the traditional financial system.
Lucrative
With a world shifting away from the use of fossil fuels, renewable energy sources are becoming more dominant. Metals like platinum are crucial in the race for renewable energy.
One of the main industries that uses up demand for platinum is the automotive industry. Platinum is a key component in the reduction of harmful emissions via catalytic converters. A huge majority of all currently mined platinum is used by the automotive industry in order to produce goods like catalytic converters in the race for clean energy.
This is only one sector in which platinum is highly valuable. As mentioned previously, the finite nature of this metal makes it a lucrative investment, and green initiatives will only drive up the momentum for demand.
Types of Platinum Investments
It should be worth noting there are three different types of platinum in which you can invest:
- A physical asset of bars or coins
- A precious metal Exchange Traded Fund
- Shares of companies involved in precious metal mining
Depending on what type of investment portfolio you're looking to build, what you choose should be specific to your circumstances and what type of investing risks you're willing to take.
Types of Platinum Investments
Depending on your risk appetite, investing in platinum may just be the next step you want to take in diversifying your investment portfolio.
You can own physical platinum in the form of coins or bullions or you can buy stocks that invest specifically in platinum bullions. However, buying platinum in the physical form is a truly straightforward way to own this precious metal.
If you have questions on how to invest in platinum, please use our contact page here to get started. Our team of experts at Investor Crate are here to help.
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Okay. Platinum next.
Best article on platinum. I like platinum for the same reasons stated, especially demand, stability, low production (mining) etc.I stared collecting scrap platinum when going to estate sales inthe late 60’s and finding jewelry with plat. stamped on them, being sold as silver plated. lol.
Great article. I’ve been investing in Platinum over 50 years. Mostly estate jewelry scrap. Demand is high. Russia, one of the two producers of platinum, is in termoileso exports of platinum is down. Invest now. In my honest opinion, prices will rise.
I loves to buying platinum coins!