Gold Vs Platinum: Which Is A Better Investment?

Gold becomes the investment of choice when inflation runs high. Wars and geopolitical tensions also prompt investors to seek refuge in the yellow metal.


If you look at the material value of precious metals, platinum sits at the top. The shiny white metal is considered a strong symbol of value and quality. The supply of platinum is much lower vs that of gold. It’s also far more difficult to extract than the yellow metal. As an investment, platinum doesn’t have as long a history as gold, which has been facilitating trade since ancient civilizations.

Unlike gold, platinum is highly malleable. It also has a number of industrial applications. The automobile industry relies heavily on platinum to make catalytic converters for cars, buses and trucks to reduce emissions. It’s also used in turbine engines, medical devices, computers, and the petroleum industry.

While gold is produced in dozens of countries around the world, almost all of the world’s platinum is mined only in two countries – South Africa and Russia. Any political or economic difficulties in these countries could have a significant impact on the price of platinum. Or the two countries could join hands to artificially inflate the platinum prices.

Platinum has a much wider application in the industry vs gold. So, its value depends on the laws of supply and demand rather than the sentiments of investors. It behaves like other industrial metals such as silver and aluminum.

The value of platinum correlates to the performance of the wider economy. If the economic and political conditions are stable, the industrial demand for platinum shoots up. So do its prices. In times of poor economy, demand for vehicles, turbine engines, and heavy machinery declines. It causes platinum prices to fall.

The auto industry also affects platinum prices because it accounts for nearly half of the world’s platinum consumption. When Volkswagen’s emissions scandal came to light in 2015, demand for diesel engines started declining. As a result, platinum prices fell as much as 15% within three months.

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