Platinum vs. gold investment: a comparative guide for investors

Summary 

How do I invest in precious metals? 

Investments take many forms, including bonds, stocks, mutual funds, and EFTs. Precious metals like platinum and gold are also included in the category. 

Platinum and gold are two nontraditional investment assets that investors can purchase to secure various advantages, including hedging against inflation.  

Platinum vs. gold investment both have unique benefit and risk profiles, each suited to specific kinds of investors with various financial goals. 

Which metal should you choose for your portfolio? 

Platinum vs. gold investments are both solid investment options, but the metal you choose will depend on a range of factors.  

If you are focused on long-term investing and stability, gold is typically the better option. It has an extensive history of reliable demand, which tends to spike during economic downturns. 

Investing in platinum vs. gold is often preferable as platinum often performs more favorably during times of rapid economic growth.  

As industrial and manufacturing industries thrive, platinum prices often rise concurrently, making this metal a solid short-term investment that may provide larger and more immediate profit returns than gold.  

However, platinum has far higher volatility, which means that it will suit investors with a high-risk tolerance. 

Investing in platinum 

Platinum may be as much as thirty times rarer than gold, with around 190 metric tons mined globally each year.  

Gold is far more abundant, with up to 3,300 metric tons mined annually around the world.  

Platinum also has a different history compared to gold and serves a wide range of uses thanks to its density and malleable nature. 

The metal is widely used in industrial, automobile, medical, aircraft, and jewelry manufacturing settings, among other settings.  

As it is so widely used, its value is driven primarily by industrial supply and demand. This also means that its price fluctuates much more than gold's, making platinum an investment that is potentially more volatile yet more rewarding. 

Investing in gold 

Gold has held significant value in human societies for thousands of years and has maintained space in our economic systems for dozens of generations.  

Gold formed the foundation of our monetary systems until the abolishment of the US gold standard.  

Today, however, its value fluctuates according to supply and demand, with demand stemming in part from industries like aerospace, electronics production, and even dentistry. 

However, most of gold’s demand comes from the investment sector and jewelers.  

Is gold a good investment right now? This answer depends on the state of the economy.  Investors use this precious metal to diversify their portfolios when economic conditions turn down, with gold prices increasing during economic crises and slowdowns. 

Market dynamics and price drivers: what impacts the price of platinum and gold? 

Investing in platinum vs. gold may offer different market dynamics, but their values often move in similar directions in the long term. Their price drivers do differ, however, according to factors affecting each metal individually. 

Platinum’s price is determined by two key factors: industrial demand from the vehicle, jewelry, and medical industries and mine production.  

South African mines and Russian production plants are critical determinants of platinum prices. This dependency on mine production and industrial demand creates platinum’s high volatility. The metal has the highest value fluctuations among all heavy metals, with prices peaking at $2,250 in 2008 and then dropping to $777 per ounce just six months later. 

Gold vs. platinum investment is far more stable as it offers intrinsic value.  

Many countries like Australia, India, the US, Canada and China produce gold, creating a stable supply, even if one nation produces less gold than anticipated. This stability is why investors use it as a hedge against inflation and often invest in gold during financial crises like the 2008 financial crisis. Between 2008 and 2011, the price of gold more than doubled from $869.75 per ounce to $1,895 per ounce. 

Platinum vs. gold investment: which is right for you? 

If you wish to focus on stable, long-term investments when choosing platinum over. gold, which is likely the best option. Its reliable supply and demand and strong value — even during an economic downturn — will create a strong foundation for your investment portfolio. 

If you have a higher risk tolerance and find yourself investing during a time of economic growth, platinum may be the better option, as its prices may improve during economic booms. You may also choose platinum if you are seeking an investment option with more robust short-term returns. 

What are the different ways to invest in gold and platinum? 

When it comes to gold vs. platinum investment, platinum can be traded physically in the form of coins or through ETFs, stocks, and mutual funds that trade platinum bullion. The New York Metals Exchange (NYMEX) also offers a wide range of platinum futures and options. 

Gold can be purchased physically in the form of coins and bullion or invested in stocks, mutual funds or ETFs that invest in the metal. The NYMEX also offers a range of gold options and futures. 

What are the pros and cons of investing in gold and platinum?  

There are many factors to take into account when considering gold vs silver vs platinum investment. 

Pros of investing in gold 

Cons of investing in gold 

Pros of investing in platinum  

Cons of investing in platinum  

Get expert financial advice 

Platinum and gold are both robust investments that can diversify your portfolio. While gold is a stable asset best suited to long-term investing and hedging inflation during tough economic times, platinum can be used to diversify portfolios during economic booms and provide returns in the short term. 

If you are considering investing in platinum vs. gold to diversify your portfolio, let Unbiased match you with an expert financial advisor to help you make the best choice for your financial future.