The Case for Investing in Platinum

The precious metals investment market is something that a lot of people still haven't tapped into, and those who have typically lean towards investing in gold and silver. After all, there are many different ways to invest in gold and silver, and both metals have always been considered to be high in value. Although gold and silver are the most common metals to invest in, many people are beginning to pay attention to platinum and now see it as a valuable investment. If you're new to investing in precious metals or are looking to expand your portfolio, here's why you should consider investing in platinum.

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History of Platinum

Although the modern history of platinum begins in the 18th century, platinum has been found in objects dating back to 700 BC. In particular, platinum was found in the famous casket of Thebes, an Egyptian sarcophagus. In 1557, Julius Caesar Scaliger mentioned platinum in a written document. At the time, he described a then unknown noble metal which no fire had been able to liquefy. This is one of the reasons that platinum had little to no value for a long time.

Additionally, natives of Central America considered platinum to be a nuisance because it got in the way while they were mining for gold nuggets. They also thought that platinum was some sort of unripe gold. For many years, they believed it had no value and was just a means of counterfeiting gold.

Spanish naval officer Antonio de Ulloa was first credited with discovering platinum. He, along with Don Jorge y Santacilia, traveled through Columbia and Peru in 1735. During their travels, they found mines with platinum and took it home with them to Spain. By 1774, platinum was established as an element.

Today, platinum is considered to be one of the most rare precious metals, and the annual world production is about 8 million ounces – about 10 percent of the world's annual gold production.

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Reasons to Invest in Platinum

Although platinum is often overlooked by many investors, there are several reasons to invest in platinum, including:

  • Limited source of supply: Even though more platinum is being found around the world, it is still much more rare than gold and silver. About 90 percent of the global platinum supply comes from South Africa and Russia, and there is uncertainty around future supply of platinum. In addition to platinum being in limited supply, it is energy and capital intensive just to get one pure ounce of platinum.

  • Growing demand: There is a growing demand for platinum in both the industrial and investment spheres. Platinum is an essential industrial commodity and is used worldwide to manufacture about 20 percent of all consumer goods. New uses for platinum are being discovered all the time due to its resistance to corrosion, extremely high melting point, electrical conductivity, and high durability. Additionally, the investment demand for platinum has also been increasing. In the past several years, there has been an increased buying of platinum by investment funds as well as private investors, mutual funds, and pension funds.

  • Price performance: Precious metals tend to perform well in less than favorable economic conditions, and platinum is no exception. In recent years, platinum has been one of the top performing asset classes and went from $350 in January 2000 to $1,250 in 2009 and has settled in around $950 in 2017.

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Investing in Physical Platinum

The best way to invest in platinum is to physically own the metal. Although there are fewer platinum products available than gold or silver, there are still a number of items you can invest in. Platinum bars are a common investment, and these bars typically sell in smaller gram sizes. Coins are another common type of bullion, and a government mint such as the United States Mint or the Royal Canadian Mint produces these coins. Some examples of platinum bullion coins include Platinum American Eagles, Platinum Canadian Maple Leafs, Australian Koala Coins, and Platinum Chinese Pandas.

Platinum, although not as popular as gold and silver, is still a great investment metal. It's rarity, collectability, and value makes it a great addition to any investor's portfolio.

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