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Should I Buy Platinum Instead of Gold?

04 Oct 2021 - Investing Information

Precious metals have been bought and held by people for centuries. We know gold as the ultimate precious metal used in jewelry, gold bars, and gold coins and it can also serve as a hedge against inflation. It has always been a symbol of wealth and power. Lately, gold has been used and traded for various other reasons also. The rise in the stock exchange and financial trading has brought more investors towards precious metals, especially gold.

Metals like gold, platinum, palladium, and others are also being increasingly used in electronics, healthcare, and automobiles. The inclusion of other precious metals into the market has created opportunities for investors to choose from. One such powerful alternative to gold is platinum. But is it precious enough to replace gold as the ultimate precious metal king?

Let us have a comparison of both these exotic metals to get a better idea.

  • Platinum, like gold, is also used to create jewelry, bars, coins, and various other industries such as healthcare, and technology.

  • Apart from their interchangeability, there is a huge gap between the demand and supply of both these metals as the supply of gold is almost 20 times higher than platinum. This makes gold an obvious choice when the metal is needed in high quantity.

  • Platinum can, however, present many advantages over gold when it comes to the metal's characteristics. Platinum is heavier, denser, and harder than its counterpart. Platinum is also a hypoallergenic precious metal that is used to create jewelry.

  • The supply of platinum is less than gold due to the number of mines mining for gold, and the limited known supply. The ratio is one to ten.

  • All these differences aside, both these metals can provide protection against inflation, and against market volatility. We can say that both gold and platinum are safe-haven investment and asset options.

After taking into consideration the above-mentioned points, is it pertinent to mention that personal preference can also play an important role in choosing between these two metals. A gold enthusiast may see all other precious metals less attractive. On the other hand, platinum lovers can see platinum as a symbol of change and innovation.

Another important factor that has lured investors toward platinum is that recently platinum costs less than gold. This is because palladium has been replacing it in the auto-motives industry.

Buying platinum instead of gold cannot be justified, at least for the foreseeable future. But we don’t have to look at this matter in this way. Instead of replacing one precious metal with another, many market experts suggest that investors keep both metals in their portfolio.

Gold or platinum, cannot be better than the other. Markets show volatility all the time due to countless global reasons. Having all your eggs in one basket can damage your financial standing. Not only metals, the same is true for other investment options.

If you want to invest in bonds, don’t invest in one type of bond. Similarly, invest in a number of precious metals that are available in the market.

Holding both gold and platinum in your portfolio can help you experience supply and demand drivers, without having to worry about the risks.

The modern market is not only affected by wars or natural calamities. The supply and demand in one sector can cause a great impact on the whole market. This is why choosing both gold and platinum along with other precious metals can bring you peace of mind and greater returns.

So stop wondering about switching between the two, and decide how much of each metal you want to retain. That will be the most important thing to decide for you.

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