Investing in precious metals such as Platinum, Palladium and others is an unknown territory for the majority of investors. The truth is that precious metals such as the ones mentioned are not so known as gold for example which means that especially beginner investors are not so much familiar with this type of investment. In this article we will talk about Platinum, one of the rarest metals on the planet and you will learn how you can benefit from it.
Platinum, a highly valued and desirable metal, has a wide range of applications including jewellery, catalytic converters, electrical contacts, pacemakers, drugs, and magnets. Because it is rare, according to Chemicool, there are only about 5 parts per billion by weight in the Earth’s crust, platinum appears to be very costly. Platinum is one of the transition metals, a band of gold, silver, copper and titanium, and most of the elements in the centre of the periodic table. Such metals’ atomic structure ensures they can easily bond with other elements.
Platinum, iridium, osmium, palladium, ruthenium and rhodium all belong to the same group of metals and share similar properties. These materials are often used in conjunction to manufacture highly durable parts for different machines, appliances and jewellery. Because of its very low level of reactivity, platinum is used in several anti-cancer drugs. About 50% of patients with cancer therapy use platinum-containing drugs. Close to half of the extracted platinum is used in catalytic converters, the automotive component which reduces toxic gases to less toxic emissions. Platinum and other platinum metals can withstand the high temperatures necessary for the emission-reducing oxidation reactions.
An intercommodity gap is the price difference between gold and platinum. There have been times in history that gold has sold for platinum at a premium and vice versa. Platinum has typically sold at a higher price than gold since 1987, but gold traded at $1,503.69 per ounce on September 2019 compared to $960.60 per ounce for platinum. In 2008, platinum sold over $1,200 an ounce to a modern-day high premium for gold. Gold has been steadily priced at a premium to platinum since January 2015. The premium was about $550, as of mid-September 2019. Platinum and gold continue to move in the same direction along with other precious metals. The price difference between the two represents the supply and demand and economic issues that affect the two metals separately, including the importance of platinum in the automotive industry and the position of gold as a refuge during economic downturns. Knowing the price of platinum relative to the price of gold— the distribution of inter-commodity — can provide important clues to current market sentiment. Often there are opportunities for profitable trading or investment when divergences occur.
As you are able to understand by now, investing in Platinum hides many opportunities as many of the top industries use it for the construction of their products and they will pay premium prices for acquiring this metal. This means that the demand, as long as the financial crisis is far behind us, is going to soar and so will also the prices.