Buying platinum by the gram provides affordable diversity and flexibility to many precious metal holdings and traditional investment portfolios. Investing in one-gram platinum bars and rounds can be a sound investment depending on your goals, risk tolerance, and available capital.
Benefits of Investing in Single Grams of Platinum
Accessibility
Single-gram platinum products offer an accessible entry point into the platinum market since the platinum price per gram is a fraction of the platinum price per ounce. This lower cost presents an affordable way to begin building a platinum portfolio, which is more accessible to a greater number of investors.
Diversification
Purchasing one-gram platinum bars and rounds helps to mitigate risk through non-correlation. The price of platinum is not dependent on the prices of gold and silver. They have different primary uses, and the price of platinum does not correlate with the prices of silver and gold. Although platinum is primarily used in industrial applications, gold and silver are mainly used as investment tools, and distinct factors impact their prices.
It is worth noting that while the price of platinum does not follow the price of gold, inflation, investor sentiment, and speculative investing can impact it.
Limited Supply
The supply of platinum is very limited, as it is significantly rarer than gold. Even the number of mines that produce platinum is limited, as it is mined mainly in two countries: South Africa and Russia. This scarcity, combined with its price volatility and the impact of real-world factors such as mining strikes and political unrest, helps ensure that demand remains strong.
Other Things to Consider
There are a few other things to consider before buying one-gram platinum bars and rounds.
Premium
One drawback of investing in one-gram platinum products is the premium. All precious metals have a premium that represents the costs of mining, refining, manufacturing, storing, and transporting a bar, round, or coin. This premium is the price you pay over the spot price and tends to be higher for smaller precious metal products than for larger ones.
Price Volatility
Supply and demand have the strongest impact on the price of platinum. Platinum is only mined in a few locations, which makes it subject to volatility since minor disruptions like economic instability and geopolitical unrest can impact the global supply. Although the industrial demand is consistent and growing, market speculation can also have an impact the price of platinum.
Use and Demand for Platinum
Around 70% of platinum is used for industrial applications, with about 40% used in automobiles. Its uses extend to glass, jewelry, and medicine, and a small 3% of platinum is used for investment tools. Demand for platinum is expected to continue growing amid the continued adoption of electric vehicles, where it is used as a catalyst in hydrogen fuel cells.
How Should I Buy One-Gram Platinum Rounds and Bars?
Dollar Cost Averaging with One-Gram Platinum Bars and Rounds
Investors utilizing a dollar-cost averaging strategy can benefit from buying one-gram platinum bars and rounds by investing a fixed amount at regular intervals. The principles of dollar-cost averaging can mitigate the woes of market volatility by spreading costs over weeks and months, allowing investors to build a platinum portfolio gradually. An added benefit of this approach is a streamlined cash flow since the costs are distributed over a fixed period.
Auto-Invest Makes Investing Easier
If you are considering a dollar-cost averaging strategy, incremental investments are an effective way to avoid the pitfalls of emotional decision-making. APMEX AutoInvest makes setting up your one-gram platinum dollar-cost averaging strategy fast and easy.
Who Should Buy One-Gram Platinum Bars and Rounds?
Buy single grams of platinum if you can wait for price growth, are looking for unique gifts, or if you simply like the metal. One-gram platinum products are a good match for investors who want to add a precious metal rarer than gold to their portfolio but have limited funds to diversify.
Investing in Single Grams of Platinum
If you are ready to begin investing in platinum by the gram, start by assessing the price of platinum per gram, premiums, and costs involved, including storage. Single grams of platinum are a sound and viable option if you consider the above factors and determine they align with your investment strategy and risk tolerance. Investing in platinum bullion might be a good option if your goals include the potential for high returns and you are comfortable with price volatility.
