Over the past few years, platinum has performed rather flatly, meaning relatively stable. At the time of writing, May 2024, you could sell a handful of platinum coins and take a stateside vacation or trade them for a Super Bowl ticket.
At its historical peak, the spot price of platinum was over $1900. Platinum is most often used as an industrial metal, so it is tied to the market that depends on it, like the automotive industry. Since it has held rather steady for the past decade or so, many invest in platinum to diversify their holdings. Like gold, platinum has a low correlation with other assets like stocks and bonds, so platinum may help you balance your portfolio.
Platinum Value
There have been times when platinum outpriced gold. Like all precious metals and commodities, the spot price is continually changing. However, as mentioned, it has held rather steady over the past few years. When the economy is doing well, the demand for products that contain platinum increases; when the economy is not doing well, many investors choose platinum to hold a portion of their wealth.
When comparing relative values, it may help to consider the gold to platinum ratio. Currently gold is at an all-time high, it would take about 2.3 ounces of platinum to buy one ounce of gold. While gold has traditionally held its value, platinum may be worth considering if you are looking to diversify.
Platinum may also be more affordable to patient investors who are looking for a lower priced entry point into investing in precious metals.
Platinum Demand
The demand for platinum is influenced by factors such as industrial applications, like catalytic converters for vehicles, jewelry production, and investment demand. Additionally, platinum’s role as a precious metal and its use in the medical, electrical, and chemical industries contribute to its demand.
Economic conditions, technological advancements, and environmental regulations can all impact the demand for platinum. Overall, the demand for platinum is driven by its unique properties and wide-ranging applications across multiple industries.
When the economy is healthy, demand for new vehicles and jewelry increases, while those with “extra” income may also invest in platinum, resulting in an increased demand.
Platinum is considered an extremely rare commodity. Many consider it to be 30 times rarer than gold. It is frequently mined in Africa, so accessibility may fluctuate and cause changes in demand.
“Rich Man’s Gold”
“Rich man’s gold” typically refers to platinum. This nickname highlights several factors that contribute to platinum’s reputation and value: rarity, demand, higher price point, diversification, and luxury jewelry.
“Rich man’s gold” underscores platinum’s rarity, higher price point, and luxurious appeal. Its unique characteristics and wide range of applications make it a valuable asset for those seeking to diversify their investment portfolio with a prestigious and potentially lucrative metal.
Typically, platinum jewelry is more expensive than gold. However, often gold bullion is higher priced than platinum bullion. Platinum has a high demand for jewelry due to its durability and hypoallergenic nature.
Looking towards the future price and demand for platinum may depend on if we develop new uses for this precious metal. As markets evolve and innovative technologies emerge, platinum is likely to remain a valuable and versatile asset for investors and industries.
Like most investments, we recommend that you speak with your financial advisor before making a large purchase decision.
