Why Platinum is Cheaper Than Gold
Despite being rare, sturdy, and offering a vast range of uses for investors, platinum remains an underdog among precious metals. For years, the shiny white metal struggled to cement its position alongside the bright yellow gold bullion, and even today stands at almost half the price of the latter.
Not only is platinum a vital part of the automobile and manufacturing industry, but even the jewelry made from this white metal is also considered more durable. One must wonder why platinum, a rarer and more useful precious metal, isn’t valued higher.
This blog discusses the reasons why gold continues to dominate the precious metal industry and metals like platinum don’t have the same value.
But first, let’s look at the uses and applications of platinum around us.
Platinum Industrial Uses
From automobile engines to airplane parts and heavy machinery, platinum is a highly favorable metal in manufacturing on the back of its strength and resistant properties. The metal has been in industrial use for many years, and where gold and silver fail to deliver, the metal speaks of its durability for practical uses.
Platinum as an Investment
While the price of platinum is generally lower than gold, it’s still fairly comparable to silver and other precious metals. So if you’re looking to invest in precious metals other than gold, then platinum is a better prospect with a higher ROI, vast utility, and market value in contrast to other metals.
However, one cannot deny the significance the importance of silver, so you must really weigh the pros and cons of each before buying precious metals.
Value of Platinum Against Gold
For years, platinum remained undervalued in contrast to platinum. In fact, the highest price platinum has ever reached is about $2,290 per troy ounce. This was in March 2008, after which the precious metal plummeted over the years and is currently priced $932 per troy ounce.
Even during the pandemic, when gold showcased a price hike of over 23 percent and silver rallied around 44 percent, platinum remained on a slow upward trajectory due to lower demands.
Why Platinum is Generally Cheaper
There may have been instances in history when platinum surpassed gold in terms of pricing; however, in general, the precious metal has been cheaper due to the following reasons.
Higher Perceptive Value of Gold
Investing in gold to make money is an age-old mantra and proven strategy of investors forever. The perceptive value of this precious metal is so strong that even rarer and more remarkable metals, like platinum, aren’t valued higher.
A Decline in Platinum Mining
Over the years, the platinum supply has rapidly shrunk. So on average, 1500 tons of gold is mined every year, whereas only 160 tons of platinum is mined. While this makes platinum a rarer precious metal, its limited availability decreases the interest of investors looking to build a portfolio in precious metals.
Increased Demand for Palladium and Rhodium
In recent years, palladium and rhodium, which belongs to the platinum family, have garnered a lot of attention. This has further dented the demand for platinum, which offers properties similar to the other two precious metals but continually faces a supply shortage.
The Volkswagen Scandal
2008 might have been the time when platinum got its worth globally. But in 2015, after the Volkswagen scandal emerged, the platinum mining industry in Africa got severely hit. In recent years, people looking to buy precious metals have avoided platinum due to the scandal caused by one multinational.
Is Platinum Worth Investing?
Despite the constraints, platinum is worth investing in precious metal. Here are some of the ways investors can make use of this metal:
- Platinum in Automobile
- Platinum Jewelry
- Platinum’s Longevity and Strength
Invest in Platinum and Other Precious Metals Now!
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Reach out to us if you’re looking to buy precious metals in the US or seek assistance with gold and silver IRA. You can call us now at 1-800-559-0088
