As a high-net-worth individual and entrepreneur, you are likely familiar with the most popular investment options, stocks, bonds, ETFs, and commodities. Are you looking for further diversification?
Here we will examine an investment option worth considering that you may not have taken into account and how it compares to gold.
There are significant distinctions between investing in gold and investing in platinum. This article breaks it down for you by comparing platinum vs gold investment, including price differences and benefits of each.
Is platinum really a viable alternative precious metal to stack? For more insights and actionable tips on asset protection, building freedom overseas, and tax reduction, sign up for our Weekly Rundown newsletter and subscribe to the Nomad Capitalist YouTube channel.
Precious Metals
Precious metals are rare metals that generally have a high value, depending on rarity, use in industrial processes, and value as a hedge against currency inflation.
The eight metals considered precious and used by investors and in industries are:
- Gold
- Silver
- Platinum
- Palladium
- Rhodium
- Ruthenium
- Iridium
- Osmium
Each metal has its own distinctive characteristics and uses. We will focus on platinum, a unique metal that has nearly doubled in value in the past twenty years.
What is Platinum?
This metal has nearly doubled in value in the past twenty years.For a long time, platinum, which is fifteen times rarer than gold, was the king of precious metals.
Platinum, known for its distinct white color, was even worth more than gold at one point.
The primary use of platinum today is in auto catalysts (the process changes harmful substances in the exhaust gases from engines into substances that are not harmful). The second most extensive use of platinum is in jewelry, particularly in China and Japan, as well as numerous other industrial uses and as an investment opportunity.
What sets platinum apart from gold? Platinum has distinct features. It is heavier and harder than gold, making it suited for use in the production of bullion bars, coins, and jewelry without the need for additional alloys.
It might be surprising that, in fact, platinum jewelry is generally more expensive than gold jewelry. This is primarily because of its exceptional quality of being virtually scratch-proof, unlike gold.
Platinum Investments
According to the World Platinum Investment Council, platinum is one of the rarest metals. It’s is found in very low concentrations in the Earth’s crust, and is approximately thirty times scarcer than gold.
Although platinum lacks the same historical prestige as gold, it offers a broad and ever-growing range of applications thanks to its unique properties. Because platinum is highly dense and malleable, it is incredibly valuable in industrial settings, leading to its utilization in various industries such as medicine, automotive, aerospace, etc.
Unlike gold, platinum is influenced more by industrial metal supply and demand, resulting in frequent fluctuations in its price and volatility.
There are several options available for you to participate in platinum investing and trading. You can opt for physical investments with platinum coins, platinum bullion, or alternatively “paper” investment options like mutual funds or exchange-traded funds (ETFs) backed by platinum bullion.
As with other metals, geopolitical factors significantly impact the supply and demand of platinum and, in turn, prices.
Unlike gold, platinum was not historically used as currency or as a precious metal, and it was even dumped as an unwanted metal for a long time.
It is only in relatively recent times that platinum has been appreciated for its actual value, primarily for industrial use. The biggest disadvantage of platinum is that it is more difficult to buy and sell.
Gold Investments
If you have already read our article, the Ultimate Guide to Gold Coins and the Benefits of Offshore Gold Storage, you will be under no doubt about the advantages of investing in gold.
Gold has well and truly proved itself, standing the test of time, with its value tracing back to ancient civilizations.
Gold has played a crucial role in our economic systems and culture and, at one time, backed most major currencies, including the US dollar.
While gold was at one time the backbone of monetary systems, it experienced more fluctuations based on supply and demand.
Gold also has extensive other industrial applications and uses, such as in electronics and aerospace, albeit to a lesser extent compared to platinum.
However, the foremost demand for gold primarily comes from jewelers and investors. During economic downturns or crises, investors turn to gold as a means to diversify their investment portfolios, causing prices to surge thanks to investor and market sentiment alone.
Similar to platinum, investing in gold can be achieved through physical ownership and other investments. Investing in physical metals can include purchasing coins or physical bullion from brokerages or precious metal dealers.
Alternatively, investors can opt for non-physical investment options such as stocks, ETFs, and mutual funds. Although, this type of investment comes with increased risk and is more suited to those looking for quick returns. For high-net-worth individuals, physical offshore gold storage is often the preferred option for long-term wealth and asset protection.
Platinum vs Gold
Whatever metal you choose to invest in, whether it be silver coins, gold bars, or platinum, your choice will be guided by your goals and motivation for investing.
How does platinum stack up compared to gold in terms of investment, stability, pricing, and liquidity?
Investment Goals
Are you looking for a more stable long-term investment? For long-term stability and security, gold is generally the preferred choice. With its established track record, gold has consistently demonstrated strong demand, especially during an economic crisis, and acts as a type of financial insurance.
On the other hand, platinum tends to outperform during times of economic growth. As manufacturing and industrial sectors flourish in global markets, platinum prices also tend to rise.
This makes platinum an attractive option for more medium-term investments, often offering higher quick returns compared to gold.
However, it’s important to note that platinum’s value can also be more volatile, experiencing significant fluctuations. Consequently, investing in platinum may be more suitable if you have a higher risk tolerance.
If you are generally a risk-averse person, then gold is more stable.
Price
Currently, platinum is sitting at around half the price of gold.
- Platinum $980 per troy ounce
- Gold €1,955 per troy ounce
When it comes to platinum vs. gold investment, historically, gold’s price per ounce has outperformed platinum over a period of 30+ years.
The peak of this difference occurred in the 1970s, primarily due to stagflation, which is a combination of slow economic growth and inflation.
However, there have also been times when platinum held a higher value. For instance, from 1987 to 2008, platinum was often traded at a higher price than gold.In the last ten years plus, however, the price of gold per ounce once again surpassed platinum’s price.
Liquidity
Both platinum and gold are considered liquid investments since they can both be traded for cash. However, gold tends to be a far more liquid metal due to the high volume of trading that takes place daily worldwide, including in the paper markets.
Precious metal experts J. Rotbart & Co. recently shared their insights on investing and storing precious metals, including platinum.
In their opinion, platinum is far more niche than gold because it is traded in much smaller volumes, is much more speculative, and is subject to ongoing uses in the industry. For example, platinum has depreciated because it was used for diesel cars, and there is now less demand for diesel engines.
Also, one of the major mining countries for platinum has been at war for over a year, meaning less supply.
Although all physical commodities are impacted greatly by supply and demand, this is even more so the case with the likes of platinum and palladium.
Platinum is an asset that is more hands-on than gold or silver, and you need to read the research to assess outputs, etc.
Gold and Platinum Investment
Clearly, investing in precious metals, such as gold and platinum, offers advantages for high-net-worth investors and entrepreneurs. These assets not only diversify an investment portfolio but also have a historical track record of maintaining value and are easily accessible.
However, it is important to acknowledge that investing in precious metals comes with unique risks and challenges that may not be present in more commonly chosen investments like stocks or bonds.
Finding a qualified financial advisor specializing in precious metal investments is crucial to navigating complexities.
At Nomad Capitalist, we recommend that anyone who invests in precious metals moves at least a portion of those offshore to a safe, secure, and neutral jurisdiction. Apply online today to become a client, and we will work as the architects and general contractors of your holistic offshore strategy, helping you diversify your assets and much more.
When you sign up as a Nomad Capitalist client, our team of professionals, including precious metal experts, will help you navigate the complexities of the global metals markets and create a holistic strategy tailored to your individual needs.
FAQs
Currently, the price of platinum is around $980 per ounce and can be quite volatile, so it is important to check the most up-to-date prices. You can find current market platinum price and other precious metals on an exchange or financial news site.
There are several disadvantages associated with platinum metal. Firstly, platinum jewelry tends to be significantly more expensive compared to other metals like gold and silver due to its rarity.
Platinum’s rarity, while on the one hand, makes it valuable, can also be a disadvantage for those interested in investing in metal. The limited supply drives up its price, making it less accessible as an investment. The drawback of platinum is its price volatility. Being significantly influenced by geopolitical events, making investing in platinum is risky.
Palladium is a robust metal mostly found in Russia, South Africa, and Canada. Palladium surpasses platinum in terms of strength and boasts diverse applications, including dentistry and manufacturing, and electronics.
Palladium has done very well in recent years, as it is used for the batteries of electric cars. Although it is far more niche than other precious metals, there are definitely investment opportunities.
