Platinum vs. Gold – What is the better investment?
Platinum and gold are two of the world’s most popular precious metals. It’s because of this that many invest in and try to profit off of them. However, if you’ve only got the funds to invest in one of these metals, you might debate which is better. Fortunately, this post will break down just that.
We’ll be going over the pros and cons of each precious metal. Discussions will surround rarity, price differential, use case, and other factors you should consider. Then, you should be ready to invest in either.
Platinum
Platinum is a rarer metal than gold, giving it inherently more value. Not only this, but it’s more difficult to dig up than its competitor.
That, and platinum is quite malleable. It has a massive use case in cars and planes, for instance. This means that its value may fluctuate based on how in-demand it is. It’s closer to silver in this regard.
For example, if the global economic state is good, people are traveling and buying cars, which requires platinum. This might cause the price to shoot up. If we’re in a bad economic state, people are traveling less, and not buying cars, meaning the price might drop. This is unlike gold, which has a much more stable value.
It’s also worth noting that physical platinum is only found in two countries worldwide. These countries are Russia and South Africa. If there is political strife in either of these regions, investing in platinum might become more volatile.
Gold
Gold has been around forever. It exists as one of the earliest forms of trade, and to this day holds significant value.
For one, gold is quite a stable asset. Prices often rise or fall much more gradually than other precious metals. This makes it a safe bet for investors of all types. That, and investors often use it as a safe haven when the world’s economic state is unsure.
Gold is much easier to find than platinum and easier to extract as well. This is why it generally isn’t seen as valuable as the latter. However, gold comes in all sorts of forms. The metal is used for jewelry purposes, has a spot in electronics, and more. Banks even store physical gold most of the time due to its value.
If you’d like, you can purchase gold in a bar, coin, jewelry, futures, ETFs, and more. The investment avenues are quite high compared to platinum.
Gold is also found all over the world, unlike platinum. In fact, almost every continent has its fair share of gold mines. This availability lends itself to a lower price overall.
Gold vs. Platinum Price Differences
Interestingly, gold and platinum prices follow similar trends. Assuming there’s no drastic economic state, platinum is generally higher than gold due to the former’s use case. However, there are many cases where gold is higher and even by a significant margin.
As mentioned, this price gap is mainly because investors use gold as a hedge. Whereas platinum has more of a use case, gold is often viewed as an investment avenue alone.
Conclusion
Gold and platinum are two of the most valued precious metals. It can be hard to choose, which is the better investment. However, one must understand that these metals serve different purposes.
If you’re looking for a more profitable investment, you might want to go with platinum. That said, if you’re okay with a more stable one, gold is your best bet. Of course, this can vary based on the state of the world when you invest. It’s important to do your research, look at price trends, and see where the market is heading before you invest.
Image source, Michael Mandiberg, via Flickr.
