When it comes to jewelry, platinum and white gold may look similar, if not almost exactly the same. However, when it comes to your precious metals portfolio, the two metals can play noticeably different roles. Learn how these two metals stack up in this comparison from America’s Gold Authority®.
Is Platinum Better Than Gold?
A lot of people wonder: Is platinum better than gold? No, platinum is not “better” than gold. Jewelers say neither metal outshines the other, although platinum is physically more durable. And both metals can coexist and complement the other in a diversified precious metals portfolio.
However, these two metals aren’t the same. Here are some factors that they share and some factors that set them apart.
- Both platinum and gold are used to create jewelry, coins, bars, and used within products from the electronics, healthcare, and automotive industries.
- Each year, about 88 tons of platinum go into the making of jewelry, compared with 2,700 tons of gold.
- Platinum is heavier, harder, and denser than gold.
- Platinum is the only precious metal used for jewelry that’s hypoallergenic, whereas gold can cause skin irritation because it’s typically mixed with an array of other metals.
- Platinum is a more reactive metal than gold. This means platinum resists corrosion more effectively than gold does.
- The supply of platinum is smaller than the supply of gold. Global production of platinum totaled 170 metric tons in 2020, compared with 3,200 metric tons of gold.
- For every one platinum mine, there are ten gold mines.
- Both platinum and gold can act as safe havens, hedges against inflation, and protection against market volatility.
Prices of Platinum and Gold
In recent years, platinum has cost less than gold. In part, that’s because demand for palladium has outpaced demand for platinum in the manufacturing of catalytic converters, which remove harmful pollutants from automotive exhaust.
Until recently, the price of platinum and gold tend to move in the same direction, along with other precious metals, according to The Balance, a personal finance website.
“The price differential between the two represents supply and demand and economic issues that affect the two metals independently, including platinum’s importance in the automobile industry and gold’s status as a refuge during economic downturns,” The Balance reports.
It’s worth noting, however, that platinum jewelry costs more than gold jewelry. That’s because of the relative scarcity of platinum.
“In jewelry form, platinum is 95 percent pure with only 5 percent alloys, and 14k gold is only 58.5 percent pure and 41.5 percent alloys,” says Mike Burnette, director of gemology at Gem Shopping Network. “Platinum is alloyed with other metals in the platinum family that have a similar cost to platinum. Gold is usually alloyed with metals like silver, copper, and zinc, which cost less than the gold itself.”
Platinum and Gold in Your Portfolio
When it comes to your precious metals portfolio, one metal isn’t necessarily better than the other. Markets frequently experience volatility and are prone to change. Putting all your eggs in one basket, such as stocks, bonds, or any single asset, can expose you to increased risk.
Gold “gets top billing” when it comes to being a store of wealth, notes Nic Johnson, Pimco’s managing director and portfolio manager for commodities, but “given relative valuations, it makes sense for [portfolio holders] to look at alternatives like silver or platinum.”
Embracing more than one precious metal can offer a shield against ups and downs within the metals category. It essentially allows you to “hedge your hedges.”
“Owning [both metals] simultaneously is the only way to get exposure to the unique supply and demand drivers behind each of them in the context of the modern market,” Visual Capitalist notes.
Learn more about how various precious metals can work alongside one another within your portfolio. Download one of our free special reports to learn on your own or call an Account Executive for a one-on-one consultation.
