Click here to get this post in PDF
While gold is a safe haven asset and something most investors have in their portfolio, you don’t see as much talk about platinum. This is a mistake, considering many investors are choosing to buy platinum over gold. Why? This post will break that down.
Right away, it’s worth noting that platinum is rarer than gold. This inherently gives it a higher value than the yellow metal. That and this also contributes to the asset’s volatility. When there’s an influx in platinum, the price might go down a bit. If there’s a drop in it, the price might rise to compensate. Experienced investors who want short-term profit will go for platinum. They simply buy low and sell high.
Gold, on the other hand, is generally a more stable asset. There’s a reason investors choose it as a safe haven during times of economic uncertainty. While it’s seen as a safe asset to hold, there’s not much value in terms of profit. At least, compared to platinum, there isn’t. That said, there are times when gold is higher priced than platinum, so do your research before investing, of course. But most of the time, gold is a safe asset for long-term profits.
It’s also worth noting that platinum is only mined in a few places around the world. This rarity brings the metal more value, and some investors might crave that. Gold, on the other hand, is mined all over the planet. It’s not much of a rarity at all. Considering both metals can be turned into, say, jewelry, a platinum ring might show status more than a gold one.
Keep in mind, platinum is used in automotive manufacturing, among other use cases. As gas-fueled carmakers realize that platinum is cheaper than the more popular metal, palladium, the price may rise as well. Cars are still relatively cheap in most countries, especially compared to electric ones like Tesla. They can be even cheaper, and customers might buy even more if platinum is used.
In that same vein, should carmakers move to a more economic stance, the price of platinum may take a hit.
Investors holding platinum will appreciate how easy it is to turn into cash. There are ways to buy platinum online, over-the-counter, or in physical bullion. If there’s an easy way to convert an investment into funds, investors will appreciate it.
Put simply, platinum might occasionally fall below gold, but the price is much more likely to shoot up in a short time.
Where Does Platinum Come From?
As mentioned, platinum is only found in a few places around the world. In fact, only Russia and South Africa produce the precious metal. This leaves a ton of room for price manipulation, hence the asset’s volatility.
For example, if there are political tensions with Russia, platinum’s price might rise to account for it. Mines in South Africa have suffered power loss before, making the asset more valuable as well. If a gold mine in one country falls on hard times, there are already more around the world. It’s not a big deal. But with just a few ways to acquire platinum, and hardships will greatly affect the price.
Overall, investors see platinum as more of a profitable precious metal. That’s why they invest in it over gold. While volatility might put off some investors, experienced ones may thrive off of it. It’s such a small market in comparison to gold, which entices those looking for fast profits.
Of course, it’s important to do your own research and not base your purchases on others. Invest in what works for you, and you’ll be set.
You may also like: Is Gold A Good Investment?
Image Source: Unsplash.com