Why Invest in Platinum?
by Jonathan Buhalis
Platinum has unique chemical and physical properties that make it essential in a wide range of industrial and environmental applications. And yet, it is also considered one of the finest of all jewelry metals.
Over 20% of all consumer goods either contain platinum or are produced using platinum.
As a consequence, the continued expansion of advanced and developing economies has caused demand for the metal to grow at a faster pace than it is being mined.
Platinum is a Truly "Precious Metal" Platinum is the most rare of the precious metals. Roughly 85% of all platinum supplies come from South Africa and Russia. Virtually all of the platinum mined in South Africa is pre-sold to industrial users. Approximately 8 tons of raw ore must be mined to produce just one pure ounce of platinum. Today, the finest and most elegant jewelry contains platinum. Investment platinum is available in the form of American Eagle Platinum Coins.
Platinum is a multi-Purpose Industrial Metal Platinum is integral to the production of about 20% of all consumer goods. Platinum's unique physical properties make many industries dependent upon its use. Gasoline, hard disk drives, anti-cancer drugs, fiver-optic cables, LCD display, eyeglasses, fertilizers, explosives, paints and pacemakers all rely on platinum. Platinum is also the key catalyst used in fuel cells.
Chinese manufacturers consume approximately 65% of the world's platinum jewelry each year. Demand for platinum in high technology applications is soaring due to its unique properties: It is virtually impervious to corrosion, has a melting point, 1770 Celsius, is a powerful catalyzing agent and is highly conductive.
It is an Environmental Metal Over one-third of all platinum supplied to the international markets each year is used in catalytic converters to control harmful internal combustion emission, particularly from diesel engines. Higher European automobile emission standards continue to add pressure to auto manufacturers to increase the use of platinum in catalytic converters and devices like oxygen sensors. (Catalytic converters elsewhere in the world tend to use palladium.)
Platinum catalysts are a core component of fuel cells, a power generation technology that combines oxygen and hydrogen to form water and electricity. Fuel cells are poised to become the environmentally friendly power generation source of choice in the next century and a key source of future platinum demand.
Platinum is the Premium Investment Metal Platinum is known as "high-octane gold," for its stronger price moves and prospects for a higher upside. Buying platinum is an easy way to invest in worldwide economic growth because the metal is essential to the economies of many industrialized nations. Pure platinum legal tender bullion coins and bars provide a liquid, convenient, and reliable way to invest. Platinum ETFs (exchange-traded funds) are a relatively recent alternative.
Regulation New clean air legislation in the United States and in many of the world's fastest growing economies is significantly increasing the total amount of platinum used in vehicles. Platinum is essential for the wide range of products that are being consumed in nations that are experiencing rapid gains in incomes. Because of this, world platinum use per unit of world economic output has risen rapidly in the past decade.
Jewelry Platinum jewelry has gone from being a thing of the art deco past to being all the rage in North America and China. The largest economy in the world and the largest country in the world are seeing tremendous growth in platinum jewelry demand. This is in addition to Japan's relatively stable consumption of the white metal for jewelry purposes. While growth has been strong, overall market share is still low compared to gold and silver - meaning that these trends of increasing demand are sustainable for some time to come.
Investors Investment demand by individuals around the world is rising. Many are attracted to the vastly improving fundamentals in the platinum market. In rising markets, platinum normally develops a significant premium over gold. Platinum has historically tended to be more expensive than gold because it is considerably rarer and has more extensive and irreplaceable applications. In late 2011, however, the price of platinum dropped below that of gold. Whether its reputation recovers as the most precious of precious metals remains to be seen.
Platinum Group Metals
Investing in PG Metals
History of Platinum
Investing in Platinum