How Platinum is Starting to Shine for Bargain Hunters
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In the precious metals market, platinum has had a rocky history, especially in the last five years. In 2015, its value took a hit amid the emissions scandal—Dieselgate—at Volkswagen. The prices dropped to a six and a half year low as the precious metal began to lose its supremacy.
Catalysts used in diesel cars to make them more eco-friendly are responsible for nearly 40 percent of platinum’s consumption. After the scandal, the demand for diesel cars significantly dropped, and so did the demand for platinum.
The scandal had a widespread impact not only on the car production industry but the mining industry in South Africa—one of the largest producers of platinum—as well.
Since then, the metal has been trying to bounce back and many analysts consider that it finally has a leg to stand and compete in rare and precious metals category as an attractive investment option.
Before we take a look at how platinum has become a sound investment option, let’s delve in a bit of history.
Platinum in history
Investment in platinum has a fairly recent history and investors only started looking toward it in the 1970s. The metal has existed for centuries and is considered to be one of the purest metals ever found on earth.
It was previously used in a number of industrial operations once scientists discovered its advantageous physical and chemical properties. One of the least reactive metals, platinum is used in the production of materials that require stability at high temperatures due to its high melting point.
Current investment prospects
Currently at record low prices, platinum is regaining the interest of investors and bargain hunters who want to be prepared for the possibility of an economic recession. In the future, platinum will have upside potential as analysts have reported an increase in demand by the end of 2019 and in the next few years.
Due to the impact on the mining industry after the scandal, mine workers are currently in talks for wage renegotiation and that may affect its supply. If that happens, the prices of platinum and its products will certainly go up, bringing high returns on the investment.
Compared to gold and silver, platinum is a sound investment because of application in both industrial and investment world. Investors are starting to understand that and with trade tensions and inflation, platinum is finally starting to take its place back in the investment world.