Platinum price | How to trade platinum

Platinum is a very heavy precious metal and one of the densest metals. It is particularly notable for its high chemical resistance, which is why it is so widely used in industrial applications, especially in the glass, chemical and pharmaceutical industries. As this website does not focus on metal processing, we will look at platinum primarily from an investment perspective. It is the third most traded metal after gold and silver.

Current platinum price

Price change

Historical prices

Platinum deposits

Platinum is an extremely rare metal. It occurs in only very small quantities in the Earth’s crust, which could even be described as trace amounts relative to the size of the planet. It is usually found in its pure form and is sometimes mistaken for silver because of its similar appearance. When platinum was discovered in the 18th century, the largest deposits were in South America. Today, the largest platinum deposits are located in Russia and South Africa.

Uses of platinum

This precious metal was first used in ancient Egypt, where local artisans occasionally mistook it for silver. Apart from this, the first people known to have used platinum deliberately were Indigenous Ecuadorians, who used it to make jewellery. It was later also used to mint coins. Today, it is used in the industries mentioned above, in jewellery production and as a store of value. It can also serve as an investment. Platinum can be traded through almost any broker in the form of futures contracts or financial derivatives.

Investing in platinum

If you plan to invest in platinum, there are many ways to do so. You can collect and trade coins, bars or ingots. With the exception of Russian commemorative coins, these are generally bullion coins. Another option is to invest in finished platinum jewellery. In this case, the item’s artistic qualities add value alongside the platinum itself. Leading watchmakers use platinum to produce limited editions, which can also make a very attractive investment, especially if you are knowledgeable about watches.

Investing in platinum can be relatively risky. As with other commodities used in industry, platinum prices are more volatile than gold prices. In 2008, the price of platinum fell by more than 65%. By comparison, the price of gold fell by “only” 30% over the same period.

Factors affecting the price of platinum

Most deposits from which platinum can be mined are located in Russia and South Africa. If either country decides to regulate platinum mining in any way, this will have an immediate upward effect on the commodity’s price. Platinum is used primarily in industry, particularly in the automotive and jewellery sectors. Demand from these industries also has a significant effect on price movements.

Platinum is not a renewable resource. Once existing deposits have been depleted, there are effectively three options. The first is to find another deposit, although this does not solve the problem and merely postpones it. Recycling previously mined and processed material is also not an ideal solution because it cannot meet the needs of a growing market. These options will almost certainly lead to higher platinum prices. In my view, the only development that could cause platinum prices to fall would be the discovery of a substitute. Given the physical and chemical properties of this metal, however, this is unlikely.

The same rules apply to platinum trading as to trading other commodities.