Platinum As An Investment

Platinum As An Investment

Platinum has a much shorter history in the financial sector than either gold or silver, which were known to ancient civilizations.

Platinum is relatively scarce even among the precious metals. New mine production totals approximately only five million troy ounces (150 Mg) a year. In contrast, gold mine production runs approximately 82 million ounces (2,550 Mg) a year and silver production is approximately 547 million ounces (17,000 Mg). As such, it tends to trade at higher per-unit prices.

Platinum is traded on the New York Mercantile Exchange (NYMEX) and the London Platinum and Palladium Market. To be saleable on most commodity markets, platinum ingots must be assayed and hallmarked in a manner similar to the way gold and silver are.

The price of platinum changes along with its supply and demand; 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, the price of platinum tends to decrease because of reduced demand, falling below the price of gold, partly due to increased gold prices. Platinum price peaked at US$2,252 per troy ounce in March 2008 driven on production concerns (brought about partly due to power delivery problems to South African mines). It subsequently fell to US$774 per troy ounce ($25/g) in November 2008. As of Sept. 7, 2012, the price of platinum is US$1,595 per ounce, compared to US$1,736.10 per ounce for gold and US$33.54 per ounce for silver. Platinum is traded in the spot market with the code "XPT". When settled in United States Dollars, the code is "XPTUSD".