A beginner’s guide to Platinum: Price, uses & market overview

Explore a thorough overview of the Platinum market, learn how it works in simple terms and get to grips with its significance as a popular global commodity.
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Updated: Mar 20, 2024
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On this page, we explore everything you need to know about Platinum. Gain insights into Platinum market trends, pricing mechanisms, and the environmental impact of Platinum. 

Read on to learn more about this popular commodity and find links to beginner friendly guides explaining how you can get involved in Platinum. 

What is Platinum?

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Platinum is a precious metal, like gold and silver. It’s a dense, white metal that’s highly valued for its durability. It’s ideal for industrial applications, because it can be easily shaped into thin wires and accelerates chemical reactions without being consumed itself.

Platinum is a key component in catalytic converters, which are used in car manufacturing to reduce emissions, and it’s also used in various electronic components as well as being found in chemicals and medical equipment.

Platinum is rare, found in very few places around the world, with the majority of mining operations in South Africa, Russia, and North America. Its rarity, combined with its desirable physical and chemical properties, contributes to its high value.

Platinum market overview

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Platinum is traded on major exchanges like the New York Mercantile Exchange (NYMEX) and the London Platinum and Palladium Market (LPPM). Typically, investors buy and sell contracts for future delivery of platinum at a set price.

Speculating on future price movements through these contracts is the most popular way to get involved in the platinum market. It isn’t the only one, however. You can buy bars or coins directly from reputable dealers or brokers, or invest in ETFs that track the price of platinum.

Is Platinum valuable? 

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Yes, Platinum is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.

  • Limited supply. Platinum is rarer than gold. Limited supply can lead to price appreciation in the long run
  • Industrial demand. Platinum plays a crucial role in car manufacturing as well as other industries, which means it has a steady and robust demand base.
  • Investment and jewellery demand. Beyond its industrial applications, platinum’s aesthetic appeal and status as a precious metal make it sought after for jewellery and as an investment.
  • It’s a safe-haven asset. During times of economic uncertainty, precious metals like platinum, silver, and gold are seen as safe investments that maintain or grow their value over time.

How to invest in Platinum

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You can invest in Platinum by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different platforms suitable for specific requirements. 

Some let you buy physical Platinum, others let you trade Platinum, and many are designed for investing in the grain. Visit our dedicated guide to discover how to invest in Platinum.

Platinum in your investment portfolio

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A diverse investment portfolio can help protect you during market uncertainty, and the inclusion of Platinum can add value while allowing you to spread your money across various markets. 

Platinum often moves independently to traditional investments like stocks and bonds. You can include Platinum in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view commodity grains such as Platinum as attractive options. 

Platinum’s long history and the fact it is a food staple for over half the world, makes it a good long term play.

Platinum vs other commodities

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Platinum is one of a number of precious metals that are in constantly high demand. Here is a brief run down of the others.

  • Gold. Gold is the most popular precious metal, with its rarity and beauty ensuring it is always in high demand.
  • Silver. Silver has appeal as both a precious metal that can be used in jewellery and one that has practical industrial applications.
  • Palladium. Palladium is used in manufacturing electronics and other industrial products.

FAQs

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Sources & references
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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.