Is Platinum More Valuable than Gold?

is platinum more valuable than gold

Gold or platinum

What is more valuable gold or platinum? In terms of historical and annual mine production, platinum bars are much rarer than investment grade gold or silver bars.

In fact, platinum has often sold at higher prices than gold over the last 50 years. Especially during the bull market in precious metals in the 1970s and 2000s.

Is platinum more valuable than gold?

Throughout history, platinum has generally been more expensive than gold and is generally considered to be the most valuable metal of all. In culture, there is a hierarchy among precious metals that is roughly expressed in their material value. At the top of this tree is platinum, the shiny white metal that is recognized worldwide as an even higher symbol of quality and value than gold. Anyone who has ever walked into a jewelry store will know the difference in price between platinum and gold jewelry, and in the music industry, an album that has sold more than a million copies is labeled “platinum”.

Platinum has its reputation for several reasons – there is less platinum in the earth’s core and it is also more difficult to extract, as only a few hundred tons of platinum are mined each year.
Measured by its occurrence on earth, platinum should therefore always be more valuable, as it is much rarer. However, the price of metals does not work this way, and although platinum should theoretically be worth more than gold, this is not necessarily always the case.

Like any other asset, the value of precious metals is determined by supply and demand – forces that can change and rise and fall depending on how the overall economy performs. Platinum differs from gold in that it has a much wider range of industrial uses, meaning that its value fluctuates in a way that is much more similar to an industrial metal than a precious metal. This means that its value tends to correlate more closely with the performance of the global economy.

Much of the industrial demand for platinum comes from the automotive industry, which uses the metal in catalytic converters to reduce emissions. The price of platinum therefore tends to be influenced by the performance of car manufacturers. A good example that illustrates this connection is the scandal surrounding Volkswagen’s cheating on emissions tests at the end of 2015.
Demand for diesel engines was severely affected by this scandal. Demand for platinum therefore fell, causing its value to plummet in the months that followed. In the three months following the revelations, platinum lost around 15% of its value.

Is platinum better for investment than gold?

The gold-platinum ratio is a good way of observing the relationship between the prices of the two metals. If the ratio is above 1, it means that platinum is cheaper than gold. A smart investor can use this ratio to find opportunities to profit from investing in one metal over another.

Each metal has its own strengths and weaknesses. Gold is VAT-free and can usually be bought much closer to the spot price, helping to maximize your return. Platinum has a VAT to pay and the premium is higher, but the price can rise much faster as it depends on industrial demand. A surge in demand could quickly push the platinum price to previous highs or even higher.

Of course, the smartest investors usually own both platinum and gold to diversify their portfolios and benefit from both metals when they are at their best.

The Gold – Platinum Ratio – Chart

20 Year Gold – Platinum Ratio Chart

Conclusion

There are important arguments in favor of investing in both metals:

Gold Investments

  1. Gold coins or bars
  2. Gold or silver bars
  3. GOLD ETF
  4. ETF gold mines – the 3 best ETFs

Platinum Investments

Due to the VAT due, we advise against investing in coins and bars.

Platinum ETC for European investors: : Xtrackers Physical Platinum EUR Hedged ETC

Platinum Futures: The contracts are traded on Globex (CME Group): Platinum Futures Contract

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