Investing in Platinum

Platinum is a precious metal commodity; its bullion has the ISO currency code of XPT. Coins, bars, and ingots are traded or collected. Platinum finds use in jewellery, usually as a 90–95% alloy, due to its inertness. It is used for this purpose for its prestige and inherent bullion value. Jewellery trade publications advise jewellers to present minute surface scratches (which they term patina) as a desirable feature in attempt to enhance value of platinum products.[58][59]

In watchmaking, Vacheron Constantin, Patek Philippe, Rolex, Breitling, and other companies use platinum for producing their limited edition watch series. Watchmakers appreciate the unique properties of platinum, as it neither tarnishes nor wears out (the latter quality relative to gold).[60]

Average price of platinum from 1992 to 2012 in US$ per troy ounce (~$20/g)[61]

The price of platinum, like other industrial commodities, is more volatile than that of gold. In 2008, the price of platinum dropped from $2,252 to $774 per oz,[62] a loss of nearly 2/3 of its value. By contrast, the price of gold dropped from ~$1,000 to ~$700/oz during the same time frame, a loss of only 1/3 of its value.

During periods of sustained economic stability and growth, the price of platinum tends to be as much as twice the price of gold, whereas during periods of economic uncertainty,[63] the price of platinum tends to decrease due to reduced industrial demand, falling below the price of gold. Gold prices are more stable in slow economic times, as gold is considered a safe haven. Although gold is used in industrial applications, its demand is not so driven by industrial uses. In the 18th century, platinum’s rarity made King Louis XV of France declare it the only metal fit for a king.[64]

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