Platinum is another of the white metals that is frequently misunderstood and offers great rewards to investors who buy rare coins and bullion. One of the primary attributes of platinum is that it is quite rare: there is approximately thirty times more gold in the world than platinum, and by most estimates, all of the platinum ever mined could fit into a twenty foot cube. Despite this, platinum trades at only a $150 premium to gold at current spot prices. The question is, given its rarity and prized value as a jewelry and industrial precious metal, why isn’t platinum currently trading at a much higher premium relative to gold?
As with palladium, platinum is widely valued in the auto industry for its use in catalytic converters, which curb dangerous emissions and, as such, protect the environment. It also shares palladium’s role in the high tech wold as a highly valued component within batteries, electrodes, LCD monitors, disk drives and numerous other electronic devices.
Platinum is also considered the most valued of the white metals in the jewelry industry, outpacing palladium and silver and enjoying a status in many circles as more desired and beautiful than gold. Platinum jewelry sales rose 11% overall in 2013, with an especially robust gain in the Indian market, rising an astounding 41% in the last 18 months. This was partially in response to the Indian government’s curb on gold imports. Adding to the massive impact that platinum is having on the Indian jewelry market is the central role that platinum now plays in the creation of diamond jewelry. It is currently incorporated into nearly 35% of all diamond jewelry sales. Clearly, platinum has assumed a major role on the global jewelry market and demand for the rarest of the white metals remains intense.
In 2009, the platinum to gold ratio was approximately 2.4 to 1, and now it stands at a paltry 1.10 to 1 ratio. With industrial demand for platinum growing steadily and demand for platinum jewelry growing by leaps and bounds, the price of this rare and fascinating white precious metal seems poised for a strong rebound in the months ahead. Platinum investment has incredible potential, especially should the ratio correct to previous years. As a bullion bank, we can source the platinum you need to add to your investments. Call us today!
PS – Did you know you can add platinum into your precious metals IRA?
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