Investing in precious metals is always a good idea, seeing as how it allows you to diversify your portfolio, as well as buy something that has a pragmatic value and industrial use.
You see, the value of bonds and stocks can drop to zero, making them completely worthless, however, this is something that cannot happen to precious metals like platinum, palladium, silver and gold. Why? Well, because their physical properties ensure that they’ll always have at least some intrinsic value. Also, in the world of commodity trading that’s so obsessed with gold and silver, why would one invest in platinum? Well, here are several reasons.
1. An ounce and a troy ounce
Due to the fact that the cost of an ounce is often discussed when it comes to the value of a certain commodity (especially precious metal), a lot of people make a mistake of checking whether we’re talking about an ounce or a troy ounce. In the United States, the most commonly used ounce is the so-called avoirdupois ounce, where a troy ounce (the one used in determining the price of platinum) is equal to 1.09711 avoirdupois ounces. For those who are making this consideration in the metric system, a troy ounce is equal to 31.1035 grams. From here, the calculation should be a simple one to make.
2. There’s a lot less of it
The first thing you need to understand the value of a certain commodity is the fact that its scarcity is one of the things that awards its value. You see, if all the platinum that was ever mined was poured as a liquid into an Olympic pool, it wouldn’t even reach the average person’s ankles. In fact, no more than 133 tons of platinum are produced annually, which means that finding a “new vein” and drastically disrupting the market is highly unlikely. While this is not a hazard that’s present with the rest of commodities either, similar things were known to have happened in the past.
3. A replacement for palladium
It’s inevitable that we discuss the impact of yet another precious metal when determining the fate of platinum. Namely, palladium is a metal that’s been widely used in the automotive industry, however, its price is spiking higher and higher, for a variety of reasons. This may make some people in the automotive industry turn towards platinum as a suitable alternative. As the demand for this rare metal goes up, its value may follow suit.
4. Price predictions
Now, one of the things that people are concerned the most with is the price prediction for 2019, which can be a bit confusing. Namely, this depends on the bank and the price may greatly differ. Namely, while Deutsche Bank expects the price to be at $820, ABN AMRO expects it to get as high as $1,100. Historically speaking, at one point in 2008, the value of platinum reached $2,253 per Oz, while its record low was somewhere at $97.70 in January 1972. For these reasons, it’s quite important to have a reliable platform specializing in platinum that you can use to keep track of prices and price changes.
5. A wide variety of uses
In one of the previous sections, we’ve mentioned the fact that platinum is a great investment seeing as how it has a wide industrial use which almost guarantees that it will remain relevant. Other than the automotive industry, which we’ve briefly mentioned as a possibility, it’s important to mention that platinum compounds tend to be used in silicone manufacturing, as well as manufacturing of drugs. It’s also used for the production of fuel and information technology (such as hard discs) but also in the production of glass and dental implants. The wide scope of industries that this material is relevant for is crucial for its reliability.
6. Physically owning the metal
One of the things that a lot of people often lose from sight is the benefit of physically owning a metal. Just think about it, it’s nearly impossible for one to know exactly how much platinum you own, other than to take a peek into your vault, that is until you make a profit selling the platinum in question. It’s also something that you can literally bury in your backyard and uncover years later.
Conclusion
In the end, it’s more than clear that when it comes to diversifying your portfolio, platinum is just as great of an investment as any other precious metal. Due to the fact that it’s facing growing demand, now might be the right time to invest and then wait a couple of years in order to fully capitalize on your investment.
