Virtually everyone knows about the appeal of gold, but what do you know about platinum? Gold and silver are the most popular precious metals when it comes to investments, but platinum may be a dark horse. If you are weighing a decision between investing in platinum or gold, you will need some solid information to guide your choice.
What is platinum?
Platinum is a type of precious metal that is grayish white in color. Often mistaken for silver, the name for platinum actually comes from a Spanish word meaning “small silver.” Platinum is mined most often in Columbia, Africa, and the United States but is rarely found alone. It is typically mined alongside other metals like palladium and iridium. Mining companies often find platinum when they mine for gold and silver.
Historically, platinum objects have been found in archaeological finds dating back almost 3000 years. For example, platinum was found in an Egyptian sarcophagus and casket. One reason that platinum was not very prevalent in ancient times was that no one was able to melt it for quite some time.
Platinum is more expensive than other precious metals due to the extraction process and the fact that there are fewer platinum mines than gold mines.
What is appealing about platinum as an investment?
While gold and silver IRA choices always appeal to the average investor, platinum makes a good investment too for many reasons. Limited supply certainly is one. Thanks to the few places that mine platinum tending to be geopolitically unstable, there is a certain uncertainty about the precious metal’s future.
Another reason that platinum may make a good choice is that it is less popular as an investment compared to other precious metals like gold and silver. This means that if only a fraction of the people who have invested in gold and silver IRA try expanding their portfolios with platinum, a big price spike is likely.
What are the drawbacks of investing in platinum versus gold and silver?
Like gold and silver, you can physically own the silvery metal in the form of bars and coins. Government mints from many countries produce platinum coins. Some examples include American Eagles, Australian koala coins, and Canadian maple leaves. If there was ever an extreme economic collapse when paper currencies were no longer accepted, it may be better to trade in precious metals that are more recognizable to the general public like gold and silver.
There are also more options available. These are individual retirement accounts backed by precious metals. They work the same as conventional IRAs, but hold gold or silver in the form of physical bullion.
Another key difference between gold and platinum is that platinum has more industrial applications than gold, making its price more sensitive to economic uncertainty. When things get dicey in the economy, gold prices tend to be stable or even rise, while platinum prices will tend to decrease because of reduced economic activity and industrial demand.
Both platinum and gold have many of the same appealing aspects when it comes to investing. However, the differences do stand out. That is why you would have to consider the economic conditions when you think of investing. If it is already in a downward spiral, gold will be the safer bet.