The issue of investing in gold and platinum comes down to long-term versus short-term investment goals.
What is the difference between gold and platinum?
Approximately 190 metric tons of platinum are mined globally each year. Most of the platinum production comes from two countries: South Africa and Russia.
Platinum is more difficult to produce than gold, as it is found deep in the earth and requires a more challenging refining process. It is an extremely dense yet highly malleable metal and is significant in industrial applications, including catalytic converters for cars and turbine engines for aircraft. It is also used in medical devices such as pacemakers and in jewelry.
In 2019, 3,463 tons of gold were mined globally. Gold is primarily produced in three countries: China, Australia, and Russia. It is used in several industries, including dentistry, computers, and other electronics, in aerospace, and most commonly in jewelry and other artistic applications. Many governments and individuals store amounts of gold due to its perceived value as a safe-haven currency.
Financial Resilience
Gold is traded at a significantly lower trading volume than platinum, as the trading market for this commodity is one of the largest trading markets in the world.
Platinum is affected by more price volatility due to its lower trading volume, scarcity, the difficulty of mining and production, and its association with the automotive industry. Gold prices also fluctuate, but they are more stable over the long term due to its status as a safe haven during economic downturns.
Alternative Currency
Gold is considered an alternative currency, while platinum is not.
Applications
Platinum is used in industries such as industrial manufacturing, automotive, aerospace, jewelry, and medical devices. Gold is used in dentistry, computers, electronics, aerospace, jewelry, and the arts.
Price
The price difference between gold and platinum varies over time. From 1987 to September 2008, platinum traded at a higher price than gold. Since 2011, the price of gold has surpassed that of platinum. On June 7, 2021, the price of gold was trading at $1,897 per ounce compared to $1,175 per ounce for platinum.
Which option is right for you?
If your priority is long-term investment and stability, gold is the better choice for you. There is always a demand for gold, and this demand increases during economic downturns. In contrast, platinum is closely tied to a thriving economy and can swing significantly in popularity.
However, if the economy is on the rise and manufacturing industries are expanding, platinum could be a fantastic short-term investment that offers immediate returns higher than gold.
Before choosing which precious metal to invest in, it is essential to understand your overall investment goals. Define these goals first, then research the options available in the commodities market to find the best choice.
How can I invest in platinum or gold?
The easiest way to invest in gold or platinum is to purchase the physical metals. You can buy gold or platinum in bulk from coin dealers, brokerage firms, precious metal traders, and some banks.
Gold and platinum can also be found in collectible coins. These coins carry a value beyond the metallic material and may have historical or aesthetic value.
If you do not wish to own these metals physically, you can buy stocks, exchange-traded funds (ETFs), and mutual funds that invest in gold or platinum. These instruments offer greater liquidity and do not require secure storage.
Conclusion
Precious metals like platinum and gold provide attractive opportunities for investors seeking diversification in the commodities market, each with its strengths, risks, and market trends. Choosing between platinum and gold often depends on your long-term investment goals and your ability to withstand price fluctuations. Conduct thorough research before making an investment decision.
Questions
Frequently Asked Questions (FAQs)
What is the difference between white gold and platinum?
White gold is not platinum, but a mix of metals designed to look like platinum. White gold contains about 75% gold and 25% nickel and zinc.
What are some alternatives to investing directly in gold and platinum?
If you prefer not to invest directly in commodities like gold and platinum, you can invest in companies that operate in this field. For example, mining companies can provide some level of exposure to the commodities they mine.
Source: https://www.thebalancemoney.com/platinum-versus-gold-808974
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