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James Cook - March 7th, 2022
Platinum vs Gold Investment: What Are the Differences?
10% of the American population owns gold; however, more investors are setting their sights on platinum.
Does that mean platinum will become the superior metal investing vehicle? Or, should you not waste your time and focus on investing in gold?
Throughout this guide, we’ll cover platinum vs. gold investment after covering the basics of each precious metal. Afterward, you’ll have a better idea of how you should spread your investments.
What You Need To Know About Gold
Gold has been circulated as a currency since 550 BC. For a good reason too. This malleable metal has transitioned from being used primarily as a currency to several important items that make the world spin.
Because of these applications, investors of all sizes have added gold to their portfolios, which impacts its liquidity in a good way. Moreover, this durable yellow metal acts as a means to help protect investors from inflation.
Due to its protection, happenings around the globe will affect this metal’s price. If the economy’s growing, more people will buy. If people feel like the world will catch on fire, investors will hold onto their gold.
However, don’t confuse white gold with platinum. White gold was made to look like platinum, but it’s composed of 75% gold and around 25% zinc and nickel.
1 oz Austrian Gold Philharmonics taken at one of our Investor Crate fulfillment centers.
Background Information on Platinum
Platinum doesn’t have as extensive a history as gold. Moreover, it doesn’t have much supply due to its limited availability and production. However, it’s considered a premium metal compared to others due to its qualities, which we’ll cover in a bit.
Regarding its appearance, platinum is shiny white metal and behaves like aluminum and silver.
Platinum vs. Gold Investment: Which Is the Best Precious Metal?
To understand whether you should invest in platinum at all or put more money into either precious metal, you’ll need to understand the differences between each. Not only about their composition, but their applications, fluidity, pricing, and more.
1 oz Austrian Platinum Philharmonic.
Precious Pricing
Due to platinum being scarce, it’s significantly more expensive than gold. That’s partly because only a couple of countries produce this metal—Russia and South Africa. That means if each country faces issues with mining or natural disasters, we would see the prices skyrocket.
Moreover, if a particular country had any political discourse with South Africa or Russia, the platinum prices in that country would suffer.
Conversely, dozens of countries produce gold. A few examples include the United States, Canada, and Australia. Because of this, a supply issue in one country wouldn’t affect the overall global price of the precious metal.
Regarding trades, the price of gold isn’t affected by supply and demand due to its availability. Instead, investor sentiment and uncertainty affect the yellow metal’s value.
Fortunately, you can trade both metals for cash if needed, making them ideal for over-the-counter (OTC) trading. OTC is trading that’s done between two parties off of exchanges.
Applications of Each Precious Metal
To determine whether to invest in precious metals like gold or platinum, you’ll need to understand what will raise the demands of the metal. For instance, if a company needs a precious metal for more applications, you’ll find that it’s a more liquid investment.
Gold Applications
Compared to platinum, gold’s a relatively soft and lightweight metal. Moreover, gold won’t rust, is nontoxic, and has high electrical conductivity. Because of these features, gold is ideal for:
- Jewelry, decorations, and medallions
- Consumer and business electronics
- Collectible currency
- Medical—for instance, it can treat rheumatoid arthritis, among other ailments
1/2 oz American Platinum Eagle.
Platinum Applications
Platinum is heavier and more expensive than other precious metals, making silver an ideal choice in terms of appearance. However, it’s effective at converting vehicle emissions into less harmful waste.
Keep in mind that because of its primary use as a catalytic converter, the demand for this metal may lessen until its price lowers. This is due to the rise of electric vehicle manufacturing and some manufacturers canceling the production of fossil-fuel-powered vehicles.
Because of this, manufacturers mainly use platinum for catalytic converters. However, since this precious metal won’t tarnish, some jewel crafters may use it for premium watches, jewelry, and other high-end accessories.
Trading Characteristics of Each Metal
Unlike platinum, gold is a liquid market, which means that traders move enormous amounts of it on the market daily. Because of platinum’s lack of liquidity, it’s more susceptible to price hikes.
Due to each metal’s fluctuating prices, it may be in your best interest to stick to platinum as a short-term investment. Moreover, you may want to stick to purchasing gold for long-term profits and financial security.
You can trade both precious metals in physical markets and over-the-counter (OTC). Moreover, both gold and platinum have similar exchanges with one difference.
One of the most important futures markets for gold is the COMEX division of the Chicago Mercantile Exchange (CME) group, while platinum is in the NYMEX division of the same group.
How To Invest in Each
The most significant difference that you’ll find in this category is the availability of platinum coins and bullions at precious metal dealers. Moreover, you can invest in gold in platinum by utilizing the following vehicles:
- An exchange-traded fund (ETF)
- Mutual funds
- Collectible coins with aesthetic or historical value
- Precious metal stocks
- Platinum and gold bullions
You can purchase your precious metal investments from brokerages, precious metal dealers, some banks, and coin vendors.
How To Invest in Each
So, platinum vs. gold investment, which is the right choice? That’s up to you. Now that you have all of the facts before you, you’ll need to weigh the pros and cons of each precious metal and determine where to make your investment.
If you need a vehicle to begin investing in metals, check out our silver and gold bullion Combination Crates or our monthly Platinum Crate.
This is in no way to be considered investment advice. Past performance is no guarantee of future results. Asset allocation and diversification do not ensure a profit or guarantee against a loss. Keep in mind that any form of investing involves risk and you should always consult with your financial advisor before making any financial decisions. Investor Crate, LLC., it's subsidiaries and staff will never advise you on any asset as our aim is to provide a fun and affordable service should you decide to purchase Precious Metals.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
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I didn’t know platinum was heavier than gold.
The bible talks about gold and silver. Never platinum. The ancients did not value it if they knew about it.
I prefer platinum but the price point is higher so I tend to diversify across multiple precious metals.
My current financial situation does not permit me to invest in either of these, but I would really love to own both!
I think I might add a little platinum to the stack.