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Is Today's Platinum Price Worth It?

Published on 12/07/2021 by APMEX

Valcambi Suisse Silver bars in TEP set against a purple background.

The History and Importance of Platinum Prices

Platinum is much rarer than both Gold and Silver — so rare, in fact, that all the Platinum ever mined could potentially fit in your home. The rarity of Platinum cannot be overstated because it has a vast array of uses, particularly industrial uses, including catalytic converters, laboratory equipment and even dentistry equipment.

One of the most important reasons people buy Platinum is because it helps balance their portfolio. Some investors are comfortable buying what they know, such as Gold or Silver. However, investors looking for an edge realize they need to look to under-tapped markets like Platinum. The Platinum spot price often increases with economic downturns, the devaluation of the U.S. dollar and geopolitical turmoil. Supply and demand also make Platinum prices attractive.

Platinum Prices

When someone is referring to the Platinum prices, they are referring to its spot price. The spot price of Platinum is the price a raw ounce can be bought and sold on the Precious Metals market. Platinum prices are typically listed in USD but can be converted to any local currency. The price of Platinum constantly changes throughout the world market hours based on market conditions, affecting the supply and demand for Platinum worldwide. Staying up to date on significant world events or market news, either by checking market reports or assessments from experts, is the best way for an investor to remain aware of the Platinum prices.

History of Platinum

Traces of Platinum were discovered in Gold dating back as early as 1200 BC in ancient Egyptian hieroglyphics and in European writings around 1560. Platinum is a scarce metal found only in small concentrations in the Earth’s crust and has also been identified on the Moon and in meteorites. Due to its rarity, most of the early encounters with Platinum were surrounded by confusion. In early discoveries, most thought Platinum to be an impurity in Gold instead of a Precious Metal holding its own individual value. Despite the difficulty of obtaining and mining Platinum, there is proof that it has been valuable and present through most of history.

Industry Uses

Platinum is a hot commodity in the manufacturing industry, being highly popular in constructing cars and various other electronic equipment. As a result, the progress of these individual industries directly impacts Platinum prices. Being aware of all the different uses for Platinum throughout the world will help an investor form any purchasing strategies for this popular metal.

Automotive Industry

Almost half of the annual Platinum production goes directly to the automotive industry to help control vehicle emissions. In 1974, the United States set new regulations for better air quality, which led to the creation of autocatalysts. An autocatalyst uses Platinum to convert poisonous gases from car exhausts into harmless substances. According to the CME Group, a world-leading Precious Metals market group, the automotive industry accounts for 40% of the annual Platinum demand. The high-level demand for Platinum in the automotive industry accounts for much of the Platinum price.

Industrial Uses

Industrial supply and demand for Platinum include chemical, medical, glass, petroleum and electrical uses. Industrial Platinum demand is typically determined by global economic growth or any technological advances relying on the metal for its creation. Platinum is known for its combination of chemical and physical properties benefiting industries, like manufacturing, due to its high melting point and stability. Other, less well-known applications for Platinum include medical machinery electrodes and turbine engines.

Jewelry

High-end jewelry accounts for a third of Platinum mined every year. When mixed with other Platinum group metals, Platinum creates a highly stable and noncorrosive metal perfect for jewelry. The unique combination of Platinum metals creates a resistance to wear and tarnish for the jewelry, making the product hold up better over time. Platinum has remained a popular option for buyers in the market for new jewelry.

The Gold to Platinum Ratio

The Gold to Platinum ratio indicates how much Platinum it takes to buy Gold. It shows the relative strength of Gold prices compared with Platinum prices. Investors can use the ratio as a timing indicator when deciding when to purchase Gold or Platinum. Platinum has become one of the most intriguing metals because it has historically traded at a higher price than Gold. That indicates two things, Platinum being rarer than Gold and having more industrial uses. While some investors may not wish to incorporate the Gold to Platinum ratio into their buying strategies, being aware of this ratio is beneficial to anyone wishing to learn more about Platinum prices.

Platinum Bullion

From 1 oz rounds to 10 oz bars, you quickly will find Platinum bullion products that are both beautiful and valuable. Platinum, rarer and often priced higher than Gold, is an excellent addition to any collection wishing to add diversity to their investments. There are a few different options when it comes to Platinum bullion, such as:

Coins

Platinum coins, minted either privately or by sovereign governments, are available in denominations backed by the government. Platinum coins feature any number of beautiful designs in various finishes.

Rounds

Rounds typically feature designs inspired by popular coins but, unlike coins, have no denomination or face value.

Bars

Platinum bars are more suitable for buyers looking to build assets quickly while also frequently featuring unique designs. Bars are also the most convenient choice for easy stacking and storing of your Precious Metals.

Precious Metals IRA

Like regular IRAs, any profits on your Platinum investment sales can be tax-deferred if the proceeds are kept with your reinvestment custodian or transferred to another IRA account. To qualify for an IRA investment, Platinum must be at least a .9995 fineness.

APMEX recommends discussing the pros and cons of investing with a financial advisor or professional.

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