How to invest in platinum
Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
On this page, we have provided you with the key information necessary to make informed platinum investing decisions. Read on to learn about the fundamentals of the platinum market, the different ways you can invest your capital, and whether or not now is a good time to get involved.
Where can I invest in platinum online?
If you want to invest in platinum securities – which are tradable financial assets related to the platinum market – this is most easily achievable through an online stockbroker. We have listed our analysts’ top picks below, and you can click on one of them to sign up.
Why invest in platinum?
There are an array of reasons that an investor may consider platinum. We have listed some of the key reasons that make platinum stand out from other investable assets below.
- Safe haven investment. Platinum has long been regarded a safe haven asset. This means that in times of economic instability, the price of platinum is likely to rise. As a result, investors will often flock to the precious metal during bear markets or other forms of financial uncertainty. In addition, investors will often hedge their portfolios with platinum and other safe haven assets.
- Middle ground. Platinum sits at a price point above platinum but below gold, meaning it is an attractive middle ground for some precious metals investors.
- Hedge against inflation. Inflation occurs when the fiat currency you own is devalued by economic factors like a rising cost of living and increased monetary supply. However, platinum tends to increase in price as inflation increases, and as a result, owning platinum investments can help protect you from inflationary impacts.
- Store of value. Platinum is not plugged into the traditional financial system, meaning its value is not derived centrally like a fiat currency. For investors with a distrust of the global banking system and big government, the ability to store capital independently via physical platinum bars, bullion and coins is appealing. The only real limit is how much platinum you can practically store in a secure location.
How to invest in platinum
Below, we have provided a step-by-step guide to platinum investing. Read through it to gain a grip on all the key points.
- Decide on an investment strategy. You can’t invest effectively without a plan. So, before you invest, take the time to concoct a detailed plan. For example, some of the major considerations you should make are whether you want to go long or short, and whether you want to be an active or passive investor.
- Do your research. An unreaearched or ill-researched investment is always a risky idea. To help minimise the risks your investment will face, take plenty of time to research the platinum market including all of the key supply-demand factors, recent price performance and the latest coverage by leading analysts.
- Set a budget. It is important to have a clear budget in mind before you invest. This ensures you keep things under control and don’t lose capital that you can’t afford to.
- Choose between the long term and short term. Some investors find long-term returns appealing, while others like to have a more hands-on approach by seeking short-term rewards via trading. Both of these strategies can be effective, so consider your own needs and goals when choosing between the two.
- Find an investment platform. Not every investment platform offers platinum assets. If you want to buy or trade anything platinum-related, you need access to a service that supports the precious metal. We collated some of your best options in our table above – click the button below to go to them.
Ways to invest in platinum
There are numerous ways to seek exposure to the price performance of platinum, and each has its own unique advantages. We have outlined some of the top methods below.
Invest in platinum stocks
The most straightforward way to get involved in the platinum market is with platinum stocks. These are publicly traded companies that are involved in the platinum industry in some form. Typically, this will be platinum mining companies, ranging from up-and-coming mineral explorers to seasoned producers.
Invest in platinum ETFs
For investors who want to minimnise risk, platinum ETFs are likely to be a popular choice. They come in two different forms; one is a platinum stocks ETF. This is a diversified basket of platinum securities that is designed to reflect the overall performance of the platinum market. The second form is a platinum commodity ETF, which is a tradeable fund that has its price backed by platinum stored somewhere by a financial institution.
Invest in platinum mutual funds
Mutual funds deliver expertise to your investments in an unrivalled way. They involve your capital being pooled together with that of other investors, and then an experienced fund manager decides what to invest in with this collective capital. This is a good way to speculate on platinum without needing heaps of knowledge.
Invest in platinum futures
If you want to speculate on short-term price changes, futures are the way to go. However, be aware that futures should only really be considered by investors with plenty of experience.
Invest in physical platinum
You can purchase your very own platinum bullion, bars and coins from plenty of different websites.
How does the platinum market work?
The platinum market functions with some key factors that are synonymous with the precious metals market, though it also has some unique elements to take into account.
- Autocatalyst demand. Over 200 tonnes of platinum is used each year, and the the vast majority of demand (nearly 40%) is created by the autocatalyst market. As a result, the platinum industry is closely tied in with the performance of the automotive industry.
- Jewellery. The other big demand driver for platinum is the jewellery industry, with around 25% of platinum production finding a home here. This creates a strong sense of diversification, since the two primary uses of platinum are worlds apart.
- Hedging. While far few investors opt for platinum in comparison to gold and silver, it remains a commodity that some investors use to hedge their portfolio, protecting themselves from market volatility and inflation.
- Variety. Platinum is an extremely useful material, and it isn’t limited to autocatalysts and luxury goods. It is also used in the chemical industry, glass production, electrical manufacturing and for medical pursposes. As a result, platinum is a material with a multitude of demand drivers, ensuring its value is robust.
When should you invest in platinum?
Since platinum correlates closely with the performance of its two main industries – autocatalysts and jewellery, you should take these into account. When more cars are being produced, platinum demand may well increase, leading to a price uptick. In addition, during favourable economic times, luxury good demand may increase, leading platinum to rise in value.
Is platinum a good investment in 2022?
This depends on a huge number of variables, though most importantly, it really comes down to your own needs as an investor. Platinum may not be the right investment for everybody, but it is an extremely useful material that could be ideal for someone already well-versed in the commodity sector.
Generally speaking, platinum has performed well as an investment throughout history, though no success can be guaranteed.
What should I do now?
For more on platinum, check out our trading guide and all the latest price analysis below.
Latest platinum news
Try some of our commodities trading courses for beginners
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >