30 times more scarce than gold
30 times more scarce than gold
Why Buy Platinum?
Gold and silver might shine as two of the most recognizable precious metals. But one precious metal that you should not overlook is platinum. It’s one of the rarest metals in the world.
So what role could platinum play in your portfolio?
What Is Platinum?
Platinum is a highly desirable, performance-proven, silver-white metal. Its key attributes include resistance to tarnishing and corrosion, and softness that makes it flexible. You’ll find platinum in products like anticancer drugs, catalytic converters, dental work, electronics, magnets, jet engine parts, jewelry (such as wedding bands), and pacemakers.
Most of the world’s platinum comes from mines in Russia and South Africa; it’s often found along with metals like chrome, copper, and nickel. Platinum is the third most traded precious metal in the world, behind gold and silver.
“Because so much of the supply comes from two countries, their political stability comes into play with the price of the metal as well,” Josh Simpson, a financial adviser with Lake Advisory Group, tells U.S. News & World Report. “The more stable their governments are, the lower the price.”
Forms of Platinum
Asset holders buy platinum bullion in the form of bars and coins, making up 2% to 11% of the global market for the metal. What is platinum bullion? Bullion is a bulk amount of a precious metal—in this case, platinum — that’s assessed by weight and is sold by precious metals dealers and others as bars and coins.
Beyond physical platinum, platinum stocks and ETFs are also an option for market watchers looking to diversify within an asset class.
Why Consider Buying Platinum to Diversify Your Portfolio?
Platinum was discovered in 1735. As Yahoo Finance points out, platinum has been viewed for centuries as a “strong symbol of value and quality.”
While platinum maintains a high level of intrinsic appeal and organic quality, its price does fluctuate based on supply and demand. Much of the demand comes from the automotive industry, which uses platinum to produce catalytic converters. These devices help prevent harmful automotive emissions from polluting the air. The automotive sector also relies more heavily on platinum to make “green” hydrogen and manufacture fuel cells for electric vehicles.
Rainer Michael Preiss, a portfolio strategist, writes in Forbes that platinum “might be set to trump gold going forward as the U.S. and other major economies shift their focus to clean energy and decarbonization.”
What makes platinum an attractive part of a precious metals portfolio? The reasons include:
- Platinum enjoys heavy demand in the industrial world, lending significantly to its appeal and longevity.
- Platinum is a less expensive alternative to palladium, another precious metal commonly used for industrial applications.
- Platinum historically trades at a premium to gold, according to CNN Business.
- Platinum normally costs less than gold.
- Platinum can easily be bought and sold, making it an extremely liquid asset.
- Platinum can serve as a hedge against risk.
Paul Wilson, CEO of the World Platinum Investment Council, notes that the metal is sought after as a hard asset during periods of peak global risk “because of its deep discount to gold and palladium, and due to its significant short- and long-term demand growth potential.”
Call U.S. Money Reserve today to learn more about platinum products. Or, download your free precious metal report to learn how your portfolio can benefit from a combination of gold, silver, platinum, and palladium.
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