Gold or Platinum: Which Has Greater Potential for Profit?
Gold and platinum differ in quality and features but are both known as the most precious metals in the world. Every year, a total of 3200 tons of gold is produced in countries around the world, while platinum mainly comes from Russia and South Africa and its production is limited to 250 tons a year.
Besides differing in the amount of production, gold and platinum also vary in color, weight, density and uses. Gold is famous for being the ultimate currency and is held by people as a financial commodity. Platinum, on the hand, is mostly used in industrial applications because it’s extremely hard.
People are often unsure about the value of these precious metals and are confused about which would be a better investment.
To help you make an informed decision, we’ll be comparing gold and platinum in this blog. Keep reading to find out which has a greater potential for profit.
Supply and Demand
One of the factors at play in the world’s precious metals market is supply and demand. The two are inversely related in this case, meaning when supply decreases, demand increases and so do the rates of the metal.
As stated above, gold is produced in many countries around the world. In addition to that, its mining is an easy and less costly process. But when it comes to platinum, around three-quarters of it comes from South Africa and any negative fluctuations in the country’s social and economic landscape has a significant impact on the supply of platinum. Moreover, platinum is found underground and its extraction requires specialized tools and equipment that are extremely expensive and can only be afforded by big companies.
The relationship between the price of gold and platinum goes back in history. There have been times when platinum obtained a premium to gold, and in other instances, gold had a premium to platinum. But since 1987, the price for platinum has mostly been higher than that of gold; the fact can be credited to the rarity of the metal.
Gold is a highly liquid asset as it’s a global currency. Investors engage in the buying and selling of large amounts of gold every day. Platinum, on the other hand, is a less popular trading asset. As it’s mostly used in catalytic converters, its price depends on the demand for automobiles. But platinum’s lower liquidity is what makes its price fluctuate erratically at times.
What’s The Verdict?
Arguably, gold is the safer investment option, as it has uniform value throughout the world and its demand is almost always high. But for someone who already has considerable gold assets, it’s important to invest in platinum. It helps you diversify your investment portfolio to a great extent. So when the time is right and platinum prices are cheaper than gold’s, then go ahead and take a leap!
Are you looking for an opportunity to invest in precious metals? Get in touch with Orion Metal Exchange. We’re an investment dealer with 50 years of excellent experience in the precious metals industry. We offer several investor account solutions and will help you get the best gold coins and silver bullion deals possible.