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Platinum may not be as high profile as gold and silver when it comes to precious metals investment options. This certainly does not mean platinum will not make a great investment. Like all precious metals, platinum is positioned to do well in an inflationary environment. It is scarce and it is both beautiful and useful in industry.
The most popular choices for a platinum bullion investment are sovereign coins and privately minted bars form reputable makers.
The bullion product lineup is not a broad for platinum as it is for both gold and silver. There are a relative handful of mints producing coins and bars. This is, in part, because the working with platinum is difficult. The metal is extraordinarily hard.
Platinum bars come in assay packaging, protected from damage and certified for weight and purity. In this article, we will offer all the information necessary for you to make a decision on whether this investment is for you.
People invest in platinum bars as hedge against ongoing currency devaluation. Every year governments around the world print more money and the cash people have saved buys less. Precious metals, including platinum, have an excellent record of maintaining purchasing power over long periods of time.
Hard assets such as platinum bars are also a good way to truly diversify an investment portfolio. The vast majority of Americans have little investment exposure to anything other than conventional securities. Another 2008-style financial crisis can wreck portfolios stuffed with nothing but paper as the fragile financial system crumbles.
Platinum bars also can be added to any self-directed individual retirement account (IRA). Investors planning for what lies ahead can put physical metal into storage, with all of the tax advantages afforded by a qualified retirement plan.
Platinum supplies are precarious. Most of the metal is mined in South Africa and in Russia. These jurisdictions can be difficult for miners. This is particularly true in South Africa where worker strife and electricity outages are relatively common.
Demand for platinum, meanwhile, is relatively stable. It is driven in large part by the automobile industry. Consequently, there is always potential for price appreciation based on supply shortages.
In order to understand why platinum is a bit different than other investments in precious metals, every investor should be familiar with its main uses.
Since it was first discovered in the 18th century, industry has discover a variety of different uses. Below is a list of some of the most common applications for platinum:
Platinum is used in catalytic converters. Most vehicles with internal combustion engines utilize these converters to reduce emissions. As pollution laws are becoming stricter around the world, the demand for platinum is increasing.
Perhaps the first application found for platinum was in making beautiful jewelry for people to wear. Today rings, necklaces, earrings, bracelets and watches account for 35% of the world’s total platinum demand. The jewelry industry is the second-biggest use of platinum.
Platinum works well in medical devices and implants since it’s biocompatible. It is also used in some cancer treatments.
Platinum is used in pretty much every high-tech manufacturing industry. It has been designed in to sensors and integrated circuits among other applications.
The industrial and jewelry demand for platinum far exceeds the demand for platinum bullion.
Investing in platinum bars can make a lot of sense. The primary advantage of bars is the lower price per ounce. Private mints and refiners simply charge less to produce the bars than government mints do to make the various coins.
Also, the availability of platinum coins can vary. As of this writing, the US Mint has only intermittently produced its American Eagle coin in platinum. Therefore dealers often do not have that item in stock.
Platinum bars, on the other hand, are in steady supply.
Platinum bars are easy to buy and sell at major dealers such as Money Metals Exchange. As the popularity of platinum bullion has grown, so has the production of bars and the amount of inventory in dealer stocks.
Reputable dealers often publish their ask prices live via their website. Bar prices will vary slightly based upon quantity. Brand name bars from a Swiss refiner, such as PAMP Suisse, can cost a bit more.
Money Metals Exchange also publishes our bid prices live. Investors can see how much it costs to buy and how much they receive to sell simultaneously. They can be assured they are getting a fair price, regardless of whether they are buying or selling.
Finding a reputable dealer with good quality controls is important when you are looking to purchase platinum bars. It can be tempting to buy via auction websites or online classified, but, unless you are equipped to test the bars for purity you will be taking a risk. Counterfeit bars are available for crooks to purchase in bulk - often manufactured in China.
Established dealers take great care to ensure the bars they buy and sell are genuine.
Once you have determined which dealers will stand behind their products and delivery, it becomes a question of pricing. Buying your bars at the lowest possible premium will help to maximize your investment returns.
Platinum bars are a great way to diversify a conventional portfolio filled with paper securities - stocks, bonds and mutual funds. The metal is scarce and may be subject to supply disruptions. The potential for explosive gains is there.
It is just a matter of finding a well qualified dealer with competitive prices. Once that is done, completing a transaction and securing delivery of the physical bars will be easy and straightforward.
Money Metals Exchange was named Best in the USA because of our high-quality educational content, great pricing, and white-glove customer service.