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Global Business Market , Trends, Data Analysis and Insights

Investing in Platinum Instead of Gold

Section: Journal

The development of the platinum market has been complicated, and it has relied heavily on the economic and labor conditions in two countries that aren’t always entirely stable. Those investing in platinum would do well to stay on top of the affairs in South Africa and Russia, which account for the vast majority of the platinum in the world. South Africa supplies about 70 percent of the world’s platinum, and Russia is one of the next biggest suppliers. The two nations announced this year that they would work together to grow the platinum market, which was interesting news for those investing in platinum.

It is seen as a reliable investment by many people, and it has been steadily rising for quite some time now. For those who continue to be interested in investing in platinum, it makes particular sense in today’s economic situation. There is still a lack of trust by many in the stock markets and the United States government, which has led more and more people to invest in precious metals such as gold and silver. However, more and more people are losing their confidence in the gold market and believe that the metal may be overvalued.

If that turns out to be true, those looking for an alternative to gold and to the United States dollar would be best suited by investing in platinum. It is particularly intriguing for investors due to some of the unique opportunities presented.

Taking Advantage of Market Conditions

When investing in platinum, unique conditions in South Africa and Russia can lend themselves to a lot of back and forth movements. When there are market spikes, the value of platinum may decline sharply. However, when there are labor issues or a general lack of production, the value of platinum can spike sharply. Those who are aware of this situation may be particularly interested in investing in platinum, as they stand to make more if they can take advantage of those trends.

Options for Investing in Platinum

When investing in platinum, the simplest and most straightforward way to do so is buy investing in bullion. While this may be uncommon in general, that is only due to the high cost of a bar of platinum and the difficulty in securing it. For those who have the means to buy it and protect it, buying bullion when investing in platinum is the way to go.

However, not all people have those options at their disposal. Another option is to buy exchange-traded funds when investing in platinum. These funds trade a lot like stocks, with purchases and sales able to be made from just about anywhere. When investing in platinum through an exchange-traded fund, the fund itself will buy up a large quantity of the material. It then sells shares to investors, while still maintaining physical possession of the platinum.

This enables the investor to buy a smaller share of the material than they otherwise would. They also don’t have to worry about physically protecting the investment. Another option is to buy stock in mining companies that handle platinum. Those who are good at researching companies before making investments may be able to gain a larger edge.

Another option to buying platinum is through platinum futures, which trade on the CME. These contracts are sized at 50 troy ounces and their prices are set in United States dollars and cents. The trade always ends on the third to last business day of the delivery month. Trading can continue on futures contracts for up to 15 months before they expire.

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