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Gold and Platinum Prices

Gold and Platinum Prices: Perception Becomes Reality

Most people don’t realize that Platinum prices for bars and rounds have typically been higher than Gold when you look at historical prices. In fact, it's more of an aberration when Gold and Platinum prices reverse with Gold trading at a higher spot price. Just take a look at Gold and Platinum price history charts and you will see for yourself. The reasons for Platinum prices typically trading higher are related to supply and demand, with a high use in industrial products that are found in our everyday lives. But why Gold is perceived as more valuable is as ancient as civilization.

Gold has been a currency for thousands of years and this affects the Gold prices of today. The first record of Gold's use was in 4000 B.C., when it was used as a decorative object in present-day Eastern Europe. By 1500 B.C., Gold became recognized as part of trade, with the Shekel rising as the standard Middle Eastern unit of measure. In about 400 years, China created squares that were considered legal currency. These coins were mostly a mix of Gold and other metals, with the first purely Gold "minted" coins occurring about 50 B.C. in Lydia in Asia Minor. Since then, Gold coins have been used as currency for many cultures, including America until 1933, when President Franklin D. Roosevelt outlawed Gold currency.

Throughout this time into the present, Gold has had many other uses as well, with jewelry being one of the most prevalent. Gold has also been used in a variety of scientific and medical devices and has even contributed to space exploration. But even with all of these uses, Platinum is still more useful to manufacturers, with about a third of each year's supply going to industry and another third to make catalysts for cars, a Forbes article suggests. As a result, even though the two are equally rare, with higher industry demand, Platinum often garners a higher troy ounce Precious Metal price. On the flip side, when industry wanes, Gold often attains higher prices faster than Platinum because Gold is less tied to downturns. Ultimately, much of this is about the perception of Gold as valuable commodity that is better than money – a perception Platinum often does not enjoy even as the price chart history shows that Platinum is often worth more than Gold per ounce.

The High Price of Platinum: The Demand and Perception

Trace amounts of Platinum have been discovered in predominately Gold artifacts from Egyptian tombs in 1200 B.C. It is possible the Egyptians did not intentionally know they were using Platinum. The Precious Metal was also discovered in Pre-Columbian artifacts made of a naturally occurring white Gold-Platinum alloy in the area now known as Ecuador. Imagine the premium Platinum price for these artifacts! Platinum would not come to Europe's attention until the 1500s and some even saw it as an impurity in Gold and threw it away. Today, Platinum is valued for many industrial uses.

One of the biggest industrial uses for Platinum is as a catalyst, but Platinum is also used in a myriad of other everyday things. This demand for Platinum helps drive up the Platinum price per ounce. As a catalyst, one of the most well known applications is the catalytic converter, which transforms unburned hydrocarbons in a car's exhaust into carbon dioxide and water vapor. Platinum is also used as a catalyst in the hydrogenation of vegetable oils as well as processes to create higher-octane gasoline. Other uses include Platinum wire for electrodes and being part of alloys for medical instruments, dental prostheses, permanent magnets and electrical contacts. Platinum is even used in anodes for ships and steel piers. These are just some of the many industrial uses of Platinum, which only drive up demand and Platinum spot prices.

So while Gold may be perceived as more valuable than Platinum, the truth is, Platinum is often at a higher price per ounce than Gold. Platinum investors believe the uses of Platinum and the Precious Metal prices will only grow as emerging markets demand more of these everyday items that incorporate Platinum. Just look at the Platinum price chart and decide for yourself if Platinum is a good investment for your portfolio.


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