Will Platinum Hold Its Value in the Years to Come?
Typically, platinum should be priced higher than gold, but currently, it’s trading at a much lower price than gold. What made this valuable and rare precious metal has sunk so low, and will it have a value in the future? Let’s find out.
Platinum has been considered a premium precious metal since its inception. Therefore, platinum credit cards are more valuable than gold, and an album going platinum is more successful than gold. Just 15 years ago, platinum metal was sold at double the price of gold, but now things have taken an unfortunate turn.
In the past decade, platinum has disappointed many investors with the massive price drop. It recovered in 2021, but the recent Russian and Ukrainian conflicts have shifted its price to a four-month low in April 2022.
Reasons for The Price Drop
· Volkswagen Diesel Scandal
Platinum is used in catalytic converters of cars to oxidize CO2 in diesel engines. In 2015, authorities found that the diesel engines of over 590,000 vehicles weren’t clean as required by the standards. It pushed the demand for diesel cars down, and the unfavorable taxation further aggravated this.
· Digital Currency
Today’s investors prefer digital currency like crypto over platinum and other precious metals. Platinum has been hit the most because those who invested in it in the 90s saw a massive loss in the 2000s.
· Outdated Jewelry Fashion
There used to be a time when platinum jewelry had the same importance as today’s gold and diamond pieces. But with time, this jewelry is not as fashionable, and the price drop has decreased its status.
Is Platinum a Good Investment?
Despite the scandals and problems, investing in platinum will be a good idea because the World Platinum Investment Council (WPIC) announced that the global platinum market is heading for the largest ever surplus in 2022.
Since platinum’s supply is centralized and most of it comes from one region of South Africa, it is extremely rare. So the new announcement of WPIC has offered a new wave of hope with the surplus of the scarce metal. Now, the manufacturers can buy all the platinum they want, and traders can enjoy the benefits of investing.
In the coming years, the future seems bright for platinum, and its trading price will also increase. Despite the digital currencies or outdated jewelry, the demand for the metal will still be high for industrial uses. Investing in platinum now, when the prices are lower, would bring a lot of profit in the future.
However, if you don’t wish to take such risks, you can opt to invest and hold platinum scrap and use it once the market turnaround comes.
Investing in Other Precious Metals
You can also invest in other precious metals like gold and silver for profitable and less risky investments. At Orion Metal Exchange, we let you secure your retirement with precious metals IRA accounts and trading. The benefits of investing in precious metals are numerous; get started today by contacting us.