Gold is a precious metal that has been used since antiquity in jewelry, coinage, and for decoration. You’ve probably come across gold in everyday life.
Platinum is another precious metal that is starting to be used more frequently in jewelry. The history of platinum is not as old as gold, however recently it has become a hot item for investors.
This article will breakdown gold vs platinum for investors and list some of the pros and cons of each. Keep reading to learn more.
Investing in Gold
Gold is a market that is always in flux. Every day, buyers and sellers trade large amounts of gold on the world markets. Two of the most important futures exchanges for gold are the Tokyo Commodity Exchange and the COMEX in New York.
One of the most liquid commodities in the world, the COMEX gold futures trading volume represents about 27 million ounces of gold daily. That’s a lot of gold. Gold is also traded as a physical material in markets all over the world.
Investing in Platinum
Just like gold, the most important exchanges for platinum are the NYMEX in New York and the Tokyo Commodity Exchange. Platinum coins are also traded over-the-counter and in physical markets all over the world, however, not as frequently.
The cost of platinum vs gold is more susceptible to price spikes because of the differences in liquidity. The volume of platinum vs gold that is traded leans in favor of gold. The amount of platinum that is traded is just smaller than the gold market.
Pros and Cons of Gold
When the stock market took a turn in 2007, people started putting their faith in gold instead. With a higher demand for gold and limited supply, the price of gold went up exponentially. One advantage of gold is that it holds up well in a down market.
Another pro of gold is that it doesn’t have severe inflation or deflation the way paper currencies do. Gold holds its value and doesn’t fluctuate much. Since there is a finite amount of gold in the world it is a solid choice for investments.
If you have gold as part of your investments you are more likely to hold onto your worth than someone who relies totally on banks and stocks.
A common con that is often cited in gold is its poor performance on returns. If you look back over the last 200 years at stocks, paper bonds, and gold the one that had the best returns were stocks, second to bonds and gold came in the last place.
Yep, it sounds difficult to believe but it is. Historically gold is a lousy investment.
Another con of gold investing is that you only make money with gold when you sell it. If you are trying to get rich gold isn’t going to give you income. The only way you can make money from gold is if you sell it for more than what you paid for it.
Pros and Cons of Platinum
There is a high demand for most precious metals because of a weak economy. When times become uncertain people tend to hold onto precious materials as investments.
The platinum vs gold price typically increases in value regardless of larger economic events or the global outlook.
Platinum has been a very profitable choice for investors in recent years. Gold prices have risen but platinum prices have not only kept up but exponentially increased. The platinum value vs gold is on the rise.
Platinum also faces strong demand in the manufacturing of automobiles and electronics. This will push up the price of platinum as it becomes more in demand.
What continues to make platinum vs gold investment more lucrative is that platinum is more difficult to mine and refine than gold. Platinum is being mined in only two countries all over the world: Russia and South Africa.
This can make platinum supplies more volatile and less stable driving up the price when there are limited quantities of platinum to meet the needed supply for manufacturers and automakers.
Platinum and Manufacturing
In 2008, platinum peaked at $2,300 per ounce because there were problems with platinum mines. People who could capitalize on this price surge and others like it are sure to nab a great return of their initial investment.
If you look out for the right opportunity this could happen to you too. Monitoring the automobile industry can help you invest in platinum.
If there is a large expectation of the industry but slow-moving platinum mines this could be a sign that we are going to experience another platinum peak like the one in 2008.
Since most of the world’s supply of platinum is produced in South Africa platinum is produced at a cheaper rate because South African Rand is valued less than a U.S. dollar.
Which One Is Right for Me?
Both Gold and platinum are valuable metals that can be easily traded or sold. Both precious metals have a history of increasing during poor economic climates and can bring their investor a substantial sum of money.
However, if you can purchase platinum and follow the auto manufacturing industry, you may be able to get a piece of the next big platinum price surge.
This would be much more profit than you could make with gold because as we explained gold markets do not operate in the same manner.
The Takeaway: Gold vs Platinum
There are subtle differences in gold vs platinum investments. These articles pointed out some of the major differences in how each metal is traded and the pros and cons of investing in each metal.
It can never hurt to buy gold or platinum bouillon or coins and sit on them for a rainy day. If you can buy some of these metals and wait you could be looking at a very nice payday in the future.
If you enjoyed reading this article please read our other articles on how to make money.