Overall, platinum is not a better investment than gold. Gold is more stable, is more easily extracted and its price doesn't fluctuate as much as platinum. And the value of gold is considerably greater than that of platinum. In the end, precious metals have their uses as investments.
When political or economic uncertainty hits, investors often turn to alternative or tangible assets to protect their portfolios. Precious metals such as gold are just one option available to you. However, all investments come with their risks. Platinum has higher volatility than other options, making it more susceptible to price drops.
Meanwhile, gold remains relatively stable, but it may not be a solid hedge against inflation in the short term. Gold has long been popular as a financial asset and because of its aesthetic value. Platinum is another precious metal used in jewelry and also has industrial applications. Both can be good investment options, but there are differences in terms of long-term stability and price fluctuations.
Divergences in the gold-platinum ratio present investment possibilities (the price of gold divided by platinum). The ratio was lower than one in the past, indicating that platinum was more expensive than gold. However, the current balance is around 1.6, which means platinum is cheaper and more attractive. Traditionally, gold has been considered an important financial asset and a beautiful ornament.
A long-time favorite of precious metals investors, gold has been used as a store of value for thousands of years. It is more difficult to manufacture because platinum is found lower in the ground and requires a more rigorous purification procedure than gold. On the other hand, American gold coins minted before the elimination of circulating gold in 1933 may have more than half of their total price linked to their value as collectibles. .
The COMEX gold futures contract is one of the most liquid commodity futures in the world; its daily trading volume represents about 27 million ounces of gold. Many investors invest in gold to complement traditional stocks and bonds, since gold can be used to replace fiat currency in the event of an economic downturn. That said, if the economy is on an upward trend and industrial and manufacturing industries are on the rise, then platinum can be a great short-term investment with immediate returns much higher than gold. Over a 32-year period, there were some historical cases in which the price of gold per ounce surpassed platinum.
New investors may wonder if platinum is a better investment than gold because of words like “the gold standard” and “a platinum record”. The price differential between the two represents supply and demand and the economic problems that affect the two metals independently, including the importance of platinum in the automotive industry and the status of gold as a haven during economic downturns. Therefore, it is a valuable short-term investment that usually generates higher immediate returns compared to gold. Occasionally, gold requires a premium over platinum, while platinum sometimes has a premium on gold.
However, if the economy is improving and the manufacturing and industrial sectors are expanding, platinum can be a great short-term investment with higher returns than gold. Since gold is a store of value, its price is determined by the feelings of those who accumulate it rather than by the principles of supply and demand. .