Is platinum a good long-term investment
Platinum is one of the most valuable precious metals in the world and an investment. Similar to other precious metals, platinum is also traded on the commodity exchanges. The chemical element with atomic number 78 in the periodic table has a gray-white color and remarkable chemical properties.
In the following, information will be given about what exactly constitutes platinum, what the platinum value is and how the price of platinum or the platinum price comes about. The historical development of the platinum price and the opportunities to invest in platinum are also considered. These possibilities go beyond the Russian platinum ruble, platinum coins, and platinum bars.
How can you invest in platinum?
In platinum, in more physicalshape to be invested. For private investors, for example, there is Platinum coinsorwholePlatinum bars. Both platinum coins and platinum bars are traded on commodity exchanges, and the corresponding physical products can be obtained from specialized precious metal dealers. It is no longer uncommon for retail investors to add platinum to their precious metals portfolio in physical form.
There are in New Yorkworld's largest commodity futures exchange NYMEXmentioned several times in this article. At this commodity futures exchange you can use Futures and options speculate on the future price of platinum. Depending on the online broker chosen, it can also act as a market maker and take the opposite side of a trade. In addition, you can also use Derivatives like CFDs be speculated on the platinum price.
It has already been mentioned that there is a possibility in Platinum stocks to invest. This is understood to mean companies that promote or process platinum and that are listed on the stock exchange. For investors who do not want to invest directly in the precious metal, this can be a viable alternative. Examples of platinum stocks include Impala Platinum Holdings Ltd, which is a South African producer of platinum group metals, or stocks in the British producer Jubilee Platinum PLC.
The market for platinum is smaller than, for example, the gold market, which means that the price development of platinum can experience high fluctuations. Even so, platinum is in high demand in the industry these days, which makes the platinum value high. However, this also makes the platinum price dependent on industrial demand but also on political developments, according to which an investment in platinum can be risky, because if demand decreases, so does value. The further price development is difficult to estimate, however. Therefore, investing in platinum should be well thought out. For private investors, for example, adding or completing existing silver and gold investments can be worthwhile as a long-term investment.
What is the platinum price made up of?
The platinum price is made up of a number of factors. For pricing, not only the usual market participants and thatsupply and demand relevant according to the spot price, but alsohumanEmotions. For example, the purchase price of platinum usually rises when private investorsAfraid of a financial crisis or inflation and their monetary devaluation consequences.
Mid-November 2019 costs an ounce of platinum $ 874.10as a purchase price. The material value of the precious metal is therefore scarce 40% less valuable than gold,at least when compared to the platinum price. The gold price is accordingly $ 1,464.27. Fluctuations in the supply and demand of platinum make up the price of platinumvolatile.
In case of doubt, you have to come along considerableFluctuations calculate in the platinum course. This allows regular good entry and exit points and ensures profit-taking and attractive purchase prices for platinum as an investment.
The material value of platinum is often in the same breath as the Palladium price called. Palladium is also a chemical element that has properties similar to platinum. In terms of price is Palladium is significantly more valuable than platinum. One ounce of palladium is quoted at $ 1,712.82 in mid-November 2019. This means that one ounce of palladium is worth almost twice as much as one ounce of platinum.
Many precious metals are given in the unit of troy ounce. One troy ounce is equivalent to 31.1034768 grams and thus about one sixteenth of a pound.
What is platinum anyway?
As mentioned briefly, platinum is a precious metal. With a gray-white color, the precious metal looks less noble than silver or gold at first glance. This is also reflected in the history of platinum and in its name. Platinum comes from "platina", a diminutive of “plata” with negative connotations, which means “silver” in German.
One also speaks of a Transition metal. The name is based on the position in the periodic table. The largest markets for platinum production are the automotive and jewelry industries. Because platinum is perfect for the due to its chemical properties, color and forgeability Jewelry making and the construction of Catalytic converters in vehicles. But also for the production of Laboratory equipment, dental implants and Contact materials the element is used. There are a number of other metals that have chemical similarities to platinum.
The following metals are similar to platinum:
It is believed that platinum first appeared around 3,000 BC. Was used in ancient Egypt. It was not until the 18th century AD that platinum was recognized for the jewelry processing and jewelry industry. Louis XVI. passed the verdict around 1780 that only the king was allowed to own platinum.
Where is platinum mined?
Like other precious metals, platinum occurs in its elemental form in nature; there are numerous known platinum occurrences. Because, like gold, silver and copper, platinum is a mineral. Overall are round380Locationsofplatinumknown. These platinum deposits are distributed all over the world.
Known mining areas:
Even in Germany, Italy and France were found to be platinum. Nowadays pure metallic platinum is only available in South Africa reduced. This happens in specialized platinum mines or platinum mines. Accordingly, South Africa is the greatestPlatinum conveyorthe world and with its platinum mines essential for the global supply of the market with the precious metal.
Russia, the USA and Canadaalso promote platinum in the context of non-ferrous metal production, where there are also low occurrences of platinum. In addition, platinum comes as a chemicalconnectionWithotherMinerals in front.
Market Mechanisms: What Factors Influence Platinum's Value?
Similar to other precious metals is the Shortage of raw materials is an important factor when determining the platinum price or platinum price. Decrease in demand or overproduction have a significant influence on the price development of the purchase price.
offeranddemandchange the platinum value regularly, especially in the smaller platinum market. The total annual production limits the amount of available platinum that can be used. Alsopolitical, state and social forces affect platinum production and indirectly the platinum price.
The demand side will through the automotive industry dominates. If the sales figures for cars at the leading automobile manufacturers fall, the platinum price falls accordingly. Because of the smaller market size, you can alsoInvestors with a larger order volume affect the market. This is the case for many low volume markets and is a not negligible factor.
Private investors who increasingly invest in real assets such as gold or real estate when an economic crisis looms, have no impact on the platinum value with their platinum purchases, as this usually consists of platinum coins, platinum bars or the historical platinum ruble.
Correlation of platinum to the US dollar explained
In international commodities trading, the US dollars as the key currency established. The background to this is that many of the world's major commodity exchanges are located in the United States. The price of platinum is also traded in US dollars and one of the most important commodity exchanges for platinum is the New York Mercantile Exchange (NYMEX).
The relationship between the platinum price and the US dollar behavesvice versaproportional. If the If the dollar rate falls, the platinum rate rises usually. That in turn means that the fluctuations in platinum value are related to the US currencycorrelate. This explains, among other things, the Strengthvolatility of the precious metal and thus hires Exchange rate risk for investorsrepresent.
Trading venues: where is platinum traded?
Platinum becomes mainly atthe world's largestCommodity exchanges acted. The best known of these exchanges are the New York Mercantile Exchange and the Tokyo Commodity Exchange.The precious metal is traded as futures on both marketplaces. The best-known over-the-counter trading venue isLondon Platinum and Palladium Market.The precious metal is traded in physical form in London. There is also trading in platinum in Zurich instead of.
In addition to the physical investment in platinum bars, platinum coins or the platinum ruble, investments are also in Shares in platinum companies possible. These include above all the companies that extract or process platinum.
How does the price of platinum come about?
In general, it can be said that the prices of raw materials often oppositeto theglobalEconomic growth and the situation on the financial market. For example, if stocks or bonds lose value, the prices of rare commodities and precious metals such as platinum rise. Switching from the stock market to the commodities market depends on the overall political and economic performance.
Have a big impact on the platinum price politicalFramework as well as the general economy,especially in the automotive industry. For example, the diesel scandal had a significant impact on the price of platinum.
The precious metal platinum is called on the trading venues Spot price for physical delivery certainly. This must be done immediately after the conclusion of a trade. In contrast, there is trading on the futures and options market. With these, the Platinum price for a future delivery of the precious metal agreed. The platinum prices in both markets are usually close to each other. Supply and demand are the decisive factors that determine price developments.
The troy ounce unit of measurement explained
For most precious metals, the price is usually in Dollars per troy ounce written down. One troy ounce corresponds to the weight of the so-called pharmacist ounce.
One pharmacist ounce or troy ounce is equivalent31,1034768G. The term ounce is often used colloquially. This always means the terminology of the troy ounce. The troy ounce originated in the romanunitUncia.
What is the platinum fixing?
The goal of platinum fixing is to have as many as possibleTransactions of platinum at a fixed price complete. In return, five bankers trade the price for platinum twice daily out. The negotiated platinum price is then used as a guide for all platinum deals.
Nowadays this process takes place online. Similar to an auction, the market participants enter their buying or selling interests with the corresponding quantities and asking prices. This process is then repeated to make aEquilibrium pricearises. Finally the Price published.
Historical development of the price of platinum
Historically there was many volatile developments in the platinum price range. After the discovery of the precious metal, platinum was often seen as an unpopular by-product of gold mining. In this context it was called immaturegold labeled and sometimes even thrown away.
Ultimately, platinum became more relevant to the economy because of its properties such as hardness and high melting point, among other things. The precious metal was found in the early 19th century Use in the minting of coinsand the first platinum value developed. Due to the first overproduction of platinum in Russia around 1845, there was an initial drop in the price of the precious metal.
While gold was more valuable than platinum from 1880 to 1900, In the ensuing period, platinum outperformed gold. Since 1901 the value has been for platinum often above the gold price. The climax can be found in year1924. Here it was Platinum price sometimes six times the price of gold. With increasing possibilities for use and the scarcity of materials, the price of platinum has risen continuously.
At the beginning of the 21st century, the price of platinum rose again. The two precious metals gold and platinum regularly alternated in which material is more valuable. With the financial crisis of 2007, the price of platinum also began to fall.Since 2011 However, gold won this comparison. In 2019, the gold price outperformed the platinum price by almost 40%.
Which is more valuable: gold or platinum?
Measured by the price per gram or as a troy ounce is Gold more valuable than platinum. But that was not always the case, as the historical development of the platinum price clearly shows. Platinum gets its value through that Rarity or shortage of the material. For example, 3,230 tons of gold were mined in 2017, compared to only 199 tons of platinum. If the unique uses of platinum continue to increase, the precious metal can become more valuable than gold again.
Platinum is often defeated enormousFluctuations in price development. Platinum does have one lowervalueasgoldHowever, the precious metal has an important benefit for industry and is therefore very valuable. The platinum market is clearsmaller than the gold market, which explains the volatility.
Platinum is in more physicalshape traded on commodities exchanges or via futures and options. Because political changes often have a direct impact on the value of platinum, an investment in platinum should be well thought out. Anyone who already has precious metals such as gold and silver in their portfolio can consider adding platinum. For all other investors, platinum should only make up a small part of the portfolio - if at all.
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