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Platinum vs. Gold – Which Is The Better Long-Term Investment?

Precious Metals 101

Published: January 3, 2023

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When it comes to investing in precious metals, gold and platinum are two of the most popular choices. As investors seek to diversify their portfolios and safeguard against economic uncertainty, many have turned to these valuable commodities for security. But how do they stack up when compared side by side?

In this article, we will compare platinum and gold as long-term investment vehicles by looking at how they retain value, current uses in industries, future uses, speculation, and pricing comparisons, so you can make an informed decision about which metal is right for your portfolio.

Platinum and Gold – The Two Most Valuable Precious Metals

Everyone knows that gold and platinum are two valuable commodities with long histories as reliable stores of value. But what drives supply and demand dynamics in global markets?

Platinum is a rare, naturally white metal comprised of 95% pure platinum and 5% additional alloys. This precious metal is highly valued in the fine jewelry world due to its hypoallergenic properties, making it one of the safest metals for people with sensitive skin.

Platinum also ranks 60% denser than gold, making it a more durable option. Over time, platinum’s surface texture can change, resulting in a frosted look referred to as patina which some may find appealing or easily removed if preferred.

On the other hand, gold has been around since ancient times and is still one of the most sought-after investments today. It’s a safe haven asset that protects against economic uncertainty or inflationary pressures.

Gold can be found in various purities, including 14k, 18k, 21k, and 24k. The higher karat numbers indicate the purity content in each type, with 14k having 58% purity, 18k having 75%, 21k having 87% purity, and 24k (the highest) consisting entirely of 99% pure gold. This makes 24k a valuable investment option since there are no impurities present that could alter its color over time.

Why Platinum & Gold Are Excellent Investment Vehicles

Gold and platinum have been used as investment vehicles for decades. Both are tangible assets with the potential to increase in value over time, but there are some important differences between the two.

Historical Performance

Gold has long been considered one of the most reliable investments. Its price has increased steadily since 1971, when it was first allowed to be traded freely on international markets. Platinum, however, is more volatile and its prices can fluctuate significantly depending on supply and demand factors.

Volatility of Precious Metals

Gold tends to remain relatively stable even during times of economic or political uncertainty, while platinum is much more sensitive to market fluctuations due to its industrial uses. This means that gold may be a better choice for investors who want a steady return over time, while those looking for potentially higher returns may prefer investing in platinum.

Hedge Against Inflation

Precious metals, like gold and platinum, are considered one of the best ways to protect against inflation due to their security and tangibility. During times of economic crisis, when inflation hits and the dollar’s value begins to decrease, investors tend to hold onto physical assets as their value either remains the same or increases.

Gold has been used as a currency for centuries, and when economies start to diminish, gold is usually the first commodity people turn to pay for goods and services. And as long as there’s a market for gold and platinum, their values will remain despite economic issues.

Liquidity

Gold is highly liquid and easy to trade, making it an attractive option for investors who need quick access to their funds or want flexibility when making trades. Platinum is not as liquid, so it can take longer for buyers and sellers to find each other, which could lead to delays in transactions or higher transaction costs if you’re trading large amounts of metal at once.

Current Industry Uses

Gold and platinum have come a long way from being used as currencies. Today, these precious metals have expanded outside of monetary uses and are being seen in a variety of other industries due to their unique characteristics. These examples demonstrate how gold and platinum continue to be highly sought-after commodities across multiple industries worldwide.

Jewelry Making

Gold is one of the most popular materials used to make jewelry because it is strong, malleable, durable, and does not corrode or tarnish easily. Platinum is also becoming increasingly popular due to its bright white color that doesn’t fade over time.

Electronics Manufacturing

Electronics manufacturers have long prized gold due to its excellent electrical conductivity properties, allowing it to transmit signals quickly without losing any power. It is often found on circuit boards inside computers and cell phones, which helps ensure efficient operation at all times.

Platinum is occasionally used in electronics but only in specialized applications such as medical equipment where exact control over electricity flow may be required.

Automotive Parts Production

Gold plating is often applied on automotive parts such as brake discs and calipers since this provides an extra layer of protection against corrosion from road salt during winter months when cars are driven more frequently than usual.

Platinum-based catalytic converters are also commonly found under car hoods since they help reduce harmful emissions released into the atmosphere by burning fuel more efficiently than traditional models do while still providing adequate performance levels at all times.

Potential Future Uses

Both metals are regularly used in various industries, from jewelry to electronics, but what about their future potential? Different industries are working diligently to incorporate these precious metals’ benefits into their sectors.

As industries work to turn these potential uses into real-life ones, the speculation of supply-and-demand could drastically up the price of gold and platinum, letting investors see exponential gains.

Medical Industry

Gold has been used for centuries as a healing agent, but its use in modern medicine is only just beginning to be explored. For example, gold nanoparticles can be used to deliver drugs directly into cells with greater precision than ever before, potentially leading to more effective treatments for cancer and other diseases. Gold has also been used in dental fillings due to its malleability and resistance to corrosion.

Platinum also has potential medical applications; it’s being studied as a possible treatment for Alzheimer’s disease due to its ability to reduce inflammation in the brain.

Energy & Sustainability

In energy storage solutions, gold is being explored as an alternative material for lithium-ion batteries. Its low reactivity makes it ideal for storing large amounts of energy without the risk of degradation or fire hazard. Gold can also be alloyed with other metals, such as copper or nickel, to create high-efficiency electrical contacts that can be used in solar panels or wind turbines.

In addition to gold, platinum also has potential energy applications. It has already been successfully employed in fuel cells that use hydrogen gas as a source of power generation; however, research is ongoing into how platinum could be used more efficiently within these systems while still providing reliable performance over time. Additionally, platinum catalysts are being developed for next-generation engines that will reduce vehicle emissions by up to 90%.

Computing & Nanotechnology

Finally, gold and platinum are being investigated for their possible role in quantum computing technology. Their unique physical properties at the atomic level make them suitable candidates for qubits (quantum bits), which could radically change computing speed and efficiency beyond what we currently experience today.

Besides computing, gold and platinum are being researched in nanotechnology applications thanks to their unique properties at such small scales. They are both non-toxic yet durable enough for long-term use, making them ideal materials for creating microscopic machines or sensors which could revolutionize fields like robotics or biomedicine.

Speculation Possibilities

Speculation plays an important role in gold and platinum’s value. When investors believe that the value of a metal will increase, they buy it, which drives up its price. On the other hand, when investors think that prices are too high or there’s an oversupply of a particular metal, they sell their assets, which usually drives prices down.

There are numerous factors that cause investors to sell or buy precious metals, including geopolitical events, economic data, and new technology.

Geopolitical Events

Geopolitical events can also affect speculation on precious metals. For example, if tensions rise between two countries or regions with large gold reserves, traders may speculate that gold could become more valuable due to increased uncertainty in those areas. Similarly, if news reports suggest that certain economies are slowing down, traders may expect lower demand for platinum products like catalytic converters used in cars, reducing their investments.

Economic Data

In addition to geopolitical events affecting speculation on precious metals markets, economic data releases such as inflation figures or employment numbers can also impact how traders view these assets. If inflation is higher than expected, this could lead to increased investment in gold, as it has traditionally been seen as a hedge against rising costs due to its finite supply and limited production capabilities relative to other commodities like oil or wheat.

However, if unemployment numbers come out worse than expected, traders may be less likely to invest in platinum, given its use primarily within industrial applications where job losses would likely lead to a decreased demand for the metal.

New Technology & Speculative Trading

New technologies, such as blockchain-based digital assets, have also gained traction recently. These assets could further reduce demand for traditional investments like physical bullion or ETFs backed by these metals resulting in lower pricing across all related investment vehicles.

This leads to speculative trading, which can also influence the price of both gold and platinum depending on whether buyers or sellers dominate market sentiment at any given time period. The prices often change rapidly based on news headlines or macroeconomic developments worldwide at any given moment, making it difficult to predict how prices will respond to these events.

Pricing Comparisons

When considering an investment in platinum or gold, it’s important to look at current market prices and how they compare to historical prices. Gold has been a popular choice among investors for centuries due to its historical track record of appreciation in value over time, regardless of the state of the stock market. Currently, gold is trading at around $1,744 per ounce, while platinum is trading at around $902 per ounce.

Gold tends to be more expensive than other precious metals because it’s seen as a safe haven asset that can protect against inflation or economic downturns. Its wide range of uses adds additional demand for the metal.

Platinum, on the other hand, is mainly used in automotive catalytic converters and jewelry production but doesn’t have quite the same level of demand from investors looking for protection from inflation or economic uncertainty as gold does.

Why Invest in Precious Metals?

Precious metals have been used as currency for centuries, making them one of the most reliable investment forms. But besides their history, precious metals investing comes with other benefits that include retaining their value, being a low-maintenance asset, and adding a layer of financial security.

Value Retention

An advantage of precious metals is that they tend to retain their value over time and often increase in price during economic uncertainty or market volatility. This makes them an excellent choice for long-term investors who want to protect their savings from inflationary pressures while potentially earning returns on their investments over time.

Low-Maintenance Asset

Precious metals are also relatively low maintenance compared with other investments, such as stocks or real estate, because there’s no need to monitor prices regularly or manage properties/assets directly.

You simply buy the metal at its current market rate and store it until you decide it’s time to sell – making it a convenient option for those looking for passive income streams without putting in too much effort up front.

Added Financial Security

Finally, investing in physical gold or platinum provides added security since these assets are not subject to bank failures or government intervention like paper money (e.g., fiat currencies). This means that your hard assets will remain safe, even if the stock market suddenly crashes due to unforeseen events such as natural disasters or political unrest.

Start Investing In Gold & Platinum Today

Whether you choose platinum for its higher value per ounce or gold for its stability and liquidity, deciding whether to invest in platinum or gold depends on your individual needs as an investor. Whichever metal you choose, investing in either can be a smart move that can help secure your financial future.

If you’re interested in investing in gold or platinum, give Noble Gold Investments a call at (877) 646-5347. We offer a variety of products, including gold, silver, platinum, and palladium bullion, with the option to purchase these metals within a self-directed IRA.

Precious Metals 101
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