Things You Need to Know Before Investing in Platinum
There’s more to precious metals than just gold and silver; there’s platinum too. At one point in history, platinum was sold at rates twice that of gold, but it now trades at a relatively lower rate.
So is now a good time to invest in it at a discount? Here’s the beginner’s guide for understanding platinum:
What Is Platinum?
Platinum is a naturally occurring silvery-white metal that’s heavier and harder than gold. It’s mined annually as per the market’s supply and demand as it’s relatively scarce.
South Africa produces 75 percent of the world’s newly mined platinum, and the rest lies in Russia.
Uses Of Platinum
Apart from its utmost consumption in manufacturing exceptional jewelry and within the automotive industry, platinum is used in industrial sensors, glass manufacturing, petroleum refining, electronics, medical equipment, and medications.
Platinum As An Investment
Platinum has a much shorter history in the investment catalog than gold or silver, yet it has established itself as a substantial addition to a savvy investor’s portfolio.
Between 2015 to 2019, about 15 percent of platinum demand lay within the investment segment; investors purchased it as bars, coins, or future contracts.
After the pandemic hit, the platinum industry faced a significant downfall due to labor disputes, currency instability, and political uncertainty.
Additionally, platinum was treated as a key component in the automotive industry due to its use in manufacturing catalytic converters to reduce exhaust emissions.
But with the shift to electric cars (that don’t require catalytic converters) and a slump in auto sales globally, platinum demand decreased.
Regardless, the automotive industry is now returning to platinum as the prices of the palladium have soared.
The legislation for clean air also requires automobile companies to install more catalytic converters, as the demand for traditional cars still outshines that of the electric.
Platinum is currently at rates half of that of gold, making it the perfect time to invest.
It’s an excellent long-term investment to add to your well-diversified portfolio, but not too great if you seek quick profits from short-term investments.
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