Platinum as an investment
Investment in platinum is often compared in financial history to gold and silver, which were both known to be used as money in ancient civilizations. Experts posit that platinum is about 15–20 times scarcer than gold and approximately 60–100 times scarcer than silver, on the basis of annual mine production. Since 2014, platinum prices have traded at a discount to gold. A significant portion of global platinum is mined in South Africa.[1]
Overview
[edit]Platinum is extremely scarce even when compared to other precious metals.[2] New mine production totals approximately less than five million troy ounces (160 t) each year. In contrast, gold mine production runs approximately 82,000,000 troy ounces (2,600 t) annually, and silver mine production is approximately 547,000,000 troy ounces (17,000 t) annually.[3]
Platinum is traded on the New York Mercantile Exchange (NYMEX) and the London Platinum and Palladium Market. To be saleable on most international markets, platinum ingots must be assayed and hallmarked.[4][5]
Platinum is traded in the spot market with the code "XPT". When settled in United States dollars, the code is "XPTUSD".[6]
Investment vehicles
[edit]Exchange-traded products
[edit]
Platinum is traded as an ETF (exchange-traded fund) on the London Stock Exchange under the ticker symbol LSE: PHPT and on the New York Stock Exchange as ticker symbols PPLT and PLTM[7] There are also several ETNs (exchange-traded note) available.[8]
Platinum coins and bars
[edit]Platinum bars are available from different foundries in different sizes, beginning at 1 gram, on up to 1 oz, and even 10 oz and 1 kg bars. Platinum coins are another way to invest in platinum. Since 1997, the United States Mint has been selling American Platinum Eagle coins to investors.[9]
Jewelry as investment
[edit]Jewelry has long been a store of wealth in countries such as India, with platinum increasingly popular as a metal of choice for jewelry in the nation with one of the highest cultural tendencies for jewelry purchases for both gifts and for investment.[10] This method of preserving wealth to pass on to one's heirs is also popular in Europe as well as the United States.[11]
Accounts
[edit]Most Swiss banks offer platinum accounts where platinum can be instantly bought or sold just like any foreign currency. Unlike physical platinum, the customer does not need to touch or come into physical possession of the actual metal but rather has a claim against the bank for a certain quantity of metal.[9]
Futures
[edit]Another investment option is to create a futures contract where a predetermined time and place is designated to buy or sell the platinum. Unlike options, the transaction is an obligation, and not a right. The New York Mercantile Exchange (NYMEX) and the Tokyo Commodity Exchange (TOCOM) trades in platinum futures with a minimum contract size of 50 troy ounces and 500 grams respectively.[12]
Other
[edit]Additional methods of investing in platinum include owning shares in mining companies with substantial platinum assets or exposure, as well as owning traded options in platinum.[1]
See also
[edit]- Alternative investments
- Diamonds as an investment
- Gold as an investment
- Inflation hedge
- London Platinum and Palladium Market
- Palladium as an investment
- Silver as an investment
References
[edit]- ^ a b Louth, Nick (16 December 2011). "How to trade platinum and palladium". iii.co.uk. Retrieved 2015-03-25.
- ^ "Buy Platinum Jewellery at Different Price Range in India". Platinum Evara.
- ^ "Futures & Options Trading". Archived from the original on March 2, 2009.
- ^ "London/Zurich Good Delivery List".
- ^ "Futures & Options Trading – Brands of platinum". NYMEX.
- ^ "Platinum Price in USD per Troy Ounce for Last Week". www.bullionbypost.co.uk. Retrieved 2022-11-21.
- ^ "ETF Securities to sell Platinum, Palladium shares". Commodity Online. April 27, 2010. Retrieved May 10, 2010.
- ^ "Platinum ETF and ETN list". Platinum ETF. May 15, 2012. Archived from the original on May 11, 2012. Retrieved May 15, 2012.
- ^ a b Michael Preiss, Rainer. "The Investment Case For Platinum". Forbes. Retrieved 21 February 2023.
- ^ PGI (2023-10-19). "In Q2 2023, India Tops In The Platinum Jewellery Sales, Showcasing A Remarkable Surge In Growth: PJBR". Solitaire magazine is a International jewellery magazine - India’s leading B2B gem and jewellery magazine. Retrieved 2025-05-13.
- ^ P. Saefong, Myra. "3 golden rules for buying jewelry you can wear — and resell at a profit". www.marketwatch.com. MarketWatch. Retrieved 21 February 2023.
- ^ "Platinum Jan '19 (PLF19) Futures Profile - Barchart.com". Barchart.com. Retrieved 2018-10-15.