Thursday, July 11, 2024

Why Is Platinum Cheaper Than Gold

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Some Differences Between Platinum And Gold

Why Platinum Turns Dull Faster Than White Gold

Obviously, gold and platinum differ in color, but they also differ in density and weight. If youve ever compared, for instance, a one-troy-ounce coin made of platinum and another made of gold, then you may have noticed that the platinum coin is somewhat smaller in size. They both weigh one troy ounce, but the gold coin is larger because platinum is denser.

Platinum is also much harder than gold. While 24-karat gold, or gold with a fineness of three nines, is quite soft and will bend, pure platinum is tough enough to withstand the wear and tear of daily use. To make gold hard enough to work, it needs to be reduced in purity by combining it with at least one other metal. Thats why you have 22-karat gold, 18-karat, and so on. White gold, for instance, is gold combined with other metals to alter both its look and toughness.

A Hedge Against Inflation

Gold is a popular investment during times of economic turmoil, especially when index funds like the S& P 500, FTSE 100, and the NASDAQ Composite are crashing. Unlike gemstones that offer very little use apart from being bodily ornaments and embellishments on furniture and houses, you can find gold in computers, smartphones, and televisions. Gold is famous for having many industrial applications, and people even use it as a food additive as it can be eating in small quantities.

Even though a large portion of golds value is heavily reliant on its use in consumer electronics, appliances, and architecture, it doesnt seem to move with most macro and microeconomic trends. For example, in the stock market crash of 2008, golds value came to a paltry $775 from a lofty $1000 per troy ounce. However, as the country went through the worst recession it has seen in 100 years, gold prices began to recover, eventually hitting a record high of nearly $1900 per troy ounce in the fourth quarter of 2011.

Traditionally, gold prices go on an upward trend in the aftermath of an economic crisis, and many times, even in the middle of one. More than half of the global demand for gold comes from jewelry, so its only natural for golds market value to depreciate when the prices of commodities crash. However, when investors stop panicking and begin making rational decisions again, its value begins to restrengthen, often surpassing what it was before the crisis.

Gold Or Platinum Which Is Better

If youre still having trouble deciding between gold or platinum, dont worry! If you have the budget, go for platinum. Even though platinum costs more, the upkeep is quite simple and will not be very expensive. However, you will have to do more maintenance for gold or white gold, and the cost will go down the more you polish it.

Platinum is also better if you have precious stones like diamonds or emeralds in the mix. If you cant afford platinum, gold is an attractive option that people have been using for years. All rings or jewelry require that you take care of it. Thus, your best chance is to find something you genuinely like and buy that. You have to decide on your priorities before you go shopping for a ring and once you know that you can decide.

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Platinum And Gold Combined

So why has platinum been left behind? One key reason is that it has a more industrial use than other metals. Its not just a hedge against the dollar and something used in jewelry. Platinum is a key component of catalytic converters in automobiles, which are used to reduce exhaust emissions.

The drop in car sales worldwide, along with the rise of Tesla and other electric vehicles , has affected demand for platinum.

But some commodity experts believe platinum may finally be poised for a sustained comeback. After bottoming at just under $600 an ounce in late March, prices have recovered to around $840.

The Fed has pumped more money into the markets. There is potential for more inflation as Powell talks about uncertainty and more stimulus, said Ed Moy, chief strategist at gold seller Valaurum and former head of the U.S. Mint. So there will be a point where investors turn more to alternative assets like platinum.

Platinum Is White While Gold Comes In Three Different Shades

5 Reasons Why Platinum Is Better Than Gold

Platinum is a white metal, while gold can come in three shades yellow, rose, and white.

While white gold was initially designed to mimic platinum, its basically a mixture of pure gold , nickel , and zinc.

On that note, there is little difference between platinum and white gold in terms of color, although the color of platinum is more grayish.

On the other hand, you wont have any problems distinguishing platinum from rose and yellow gold. Rose gold gets its beautiful pink hue from being mixed with pure gold and copper, while yellow golds color comes from combining gold, silver, zinc, and copper.

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Misconceptions About Platinum In Relation To Gold

A common misconception that some people have is that platinum is more precious than gold and therefore more valuable. This misconception is often reinforced by mainstream media. Take for instance credit cards. A platinum credit card usually has a higher limit than a gold card to signify it is of higher status. This reinforces the impression among the general public that platinum is more valuable than gold.

Another example can be found in the music record industry. In the U.S., a music album is certified gold after it has sold 500,000 copies. If the number exceeds 1,000,000, it is certified platinum. Again, this creates the impression that platinum is superior to gold and therefore better than gold.

Nevertheless, the truth as to which of the two, platinum or gold, is more precious is not as straightforward as some people think.

Platinum has long been considered a higher symbol of value and quality, primarily because it’s rare and more difficult to mine.

Platinum Vs Gold In Precious Metal Investment

Gold and platinum have many uses, from jewelry to electronics manufacturingbut which is the better investment?

Platinums price is highly volatile because its supply and demand are susceptible to change based on whats happening in world politics and the economy. Steep peaks and valleys could be an opportunity for significant gains but also substantial losses.

The price of gold is not so easily upset, so its stability makes it a solid investment if youre looking for an alternative to traditional stocks. Platinum is often at a higher price than gold, but this ratio can and does change quickly. As of 2022, the world has a relatively high supply of platinum, but the demand is low. For this reason, platinum prices have dropped significantly below those of gold.

Due to platinums unpredictability, seasoned investors dont typically recommend buying platinum if youre new to investing. Gold or silver is a much safer choice if youre just starting out, but platinum could be useful if you want to diversify your portfolio with more precious metals.

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More Stimulus And Auto Rebound Could Boost Prices

That could be a combination of more relief for consumers and businesses struggling due to the pandemic as well as a long-awaited package to boost infrastructure spending.

It doesnt matter who wins in November. There could be a huge amount of stimulus trillions of dollars spent, said Steven Dunn, head of ETFs at Aberdeen Standard Investments, which manages the Aberdeen Standard Physical Platinum Shares ETF.

That could make this an interesting story for platinum and all precious metals, Dunn added.

There also is a global supply deficit for platinum right now.

Platinum Is In A Supply Deficit Lifting Prices

The Truth About Buying Platinum (Itâs Not The Same As Gold Or Silver!)

The covid-19 pandemic greatly disrupted platinum mining operations. This was especially true in South Africa, the world’s #1 source for newly mined platinum.

2012 American Platinum Eagle coin

With mining stalled, the global platinum market entered a supply deficit. In other words, demand for platinum is exceeding the available supply of the precious metal. During the first quarter of 2021, demand for the metal rose by 26%.

Simple economics tells us that when demand outpaces supply, the result is higher prices.

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Platinum Is Usually More Expensive Than Gold

A big reason platinum group metals are thought by many to be more valuable than gold is that the latter is, more often than not, priced lower. Prices for gold and platinum tend to track each other quite closely, but, generally speaking, gold tends to be less expensive than the white metal platinum most of the time. Combined higher prices with the perception that platinum is much rarer than gold and you get the impression that platinum is worth more than gold with spot prices.

At the same time, it is also true that there are times when gold is more expensive than platinum. Anyone who keeps track of gold and platinum prices on Wall Street in New York at current levels or record highs, and has done so long enough, should have noticed this. So how does one explain the pricing of gold and platinum? To better understand how prices for gold and platinum are determined, it is important to look at supply and demand.

A Snapshot Of The Platinum Market

If you look at a pyramid chart that indicates the value and rarity of precious metals, platinum sits near the top with gold and rhodium. Rhodium is more expensive than gold and platinum, while platinum is more valuable than gold in some markets and nearly 50 times what silver is worth. Platinum is more difficult to mine than gold and more than twice as rare, as many experts believe that the global supply of platinum can fit inside an average living room.

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How Can You Tell If Platinum Is Real

Find any marks indicating platinum jewelry. Look for the words Platinum,” PLAT,” or PT followed or preceded by the numbers 950 or 999.” These numbers refer to the purity of the platinum, with 999 as the most pure. For example, an authentic piece of platinum jewelry might have a stamp reading PLAT999.”

Is 18k White Gold Or Platinum Better

Why is platinum so costly compared to gold, and why is it so less ...

Is Platinum Better than Gold? No, platinum is not better than gold, as platinum looks nearly identical to white gold but costs significantly more. Both 14K and 18K white gold are durable enough for everyday wear, so platinum jewelry isn’t necessary. Platinum also scratches more easily and requires more maintenance.

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Why Platinum Is Not An Obvious Long Even Though It Looks Cheap

  • Platinum prices have really declined, especially in comparison to gold and palladium.
  • Prospects for platinum do not look favorable, including supply and demand.
  • Platinum may be right for some, but most people should probably stay away.

Few commodities have done as poorly in recent years as platinum with prices at multi-year lows. For instance, compare platinum to gold and palladium, its direct rival. These two precious metals tend to be grouped together with platinum and are often compared against one another. The two charts below plot the ratio between the price of platinum and the price of gold and palladium by dividing them by each other.

In both cases, we can see how platinum has fallen in price relative to gold and palladium. In the case of gold, platinum used to be more expensive with a ratio above one. It is now at 0.61, which means that a troy ounce of platinum is worth 61% of one ounce of gold. In the case of palladium, the divergence becomes even more extreme. While platinum used to be worth two ounces of palladium, it is now only worth 57% of one ounce.

What Are The Dangers Of Platinum

While the metal is non-toxic, platinum salts can be harmful for human health. They can cause hearing damage, bone marrow and kidney damage, cancer, and DNA alterations. Platinum salts also cause damage to the intestines and allergic reactions. Short-term exposure may cause irritation of the throat, nose, and eyes.

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Precious Metal Trends: Is Platinum More Valuable Than Gold

Investors are always looking for the next big thing, and platinum has been getting more attention recently because of its limited supply and high demand, leading to big returns for investors. Gold and silver have been common targets for precious metal investments for a long time, but platinums popularity is relatively recent despite its widespread use for manufacturing and jewelry.

Is platinum more valuable than gold? Is it a good investment? Read on as we aim to answer these questions and more about this rare, silver-white metal.

For more information on investing in a gold IRA, visit our Learn About Gold website.

Is Wearing Platinum Good For Health

$100,000 in Platinum Bars | Why I’m Buying

The health effects of platinum are strongly dependent upon the kind of bonds that are shaped and the exposure level and immunity of the person that is exposed. Finally, a danger of platinum is that it can cause potentiation of the toxicity of other dangerous chemicals in the human body, such as selenium.

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Platinum Is Less Rare Than Gold Underground But Gold Is Less Rare Above Ground

A misconception surrounding platinum is that it is much rarer than gold. It is true that the amount of gold above ground far exceeds that of platinum. But this is because the amount of gold that is mined worldwide far exceeds that of platinum. Furthermore, the mining of gold dates back all the way to antiquity thousands of years ago.

On the other hand, platinum mining only started in earnest a few hundred years ago. Being a precious metal, gold is usually stored and kept safe by its owner. What this means is that most, if not all, of the gold that has ever been mined, is still present with us today. The combination of higher gold production and the fact that gold mining has taken place for much longer results in less platinum than gold in the world above ground.

If you take into account the platinum that is present underground in the earths crust, the picture becomes much more complicated. In fact, data from the U.S. Geological Survey indicates that platinum is actually more common in the earths crust.

Is Platinum A Better Investment Than Gold

Gold and platinum are two of the most widely known and utilized precious metals. Both have value in their use in jewelry and industrial applications, whether in catalytic converters or electronics .

Investment-worthy gold can be yours today!

Platinum, a silver-colored metal, is durable and dense metal commonly used in manufacturing of car and plane parts. Gold is a yellowish metal that is popularly used to create jewelry. Common phrases like the gold standard and a record going platinum may have new investors wondering: is platinum a better investment than gold?

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Supply And Demand Determine How Much You Pay For Platinum And Gold

Supplies of gold far exceed that of platinum, at least above ground. On top of that, platinum mining is highly concentrated in one country. South Africa accounts for roughly three-quarters of the total production of platinum. Its not hard to imagine that if something negative was to occur in South Africa, a labor strike, for instance, platinum prices will rise as there is not much of an alternative.

In contrast, gold mining occurs pretty much in every corner of the planet. A supply disruption somewhere will have much less of an impact on prices. The mining of gold is also much easier and less costly than platinum on average. A good portion of it is found on the surface, for example along a river. Single men can set out as gold prospectors and try their luck with only their bare hands and a few tools. This has been going on for thousands of years and it still happens to this day.

On the other hand, platinum is usually found in deep underground mines as a byproduct. Platinum mining often requires difficult extraction from hard rock. This is a costly process, which is only affordable to big companies with expensive machinery.

Why Platinum Has No Resale Value

White Gold Vs Platinum

Platinum also has poor resale value as only a limited number of shops buy it back. Besides, compared with gold jewellery, making charges, close to Rs 500 per gram, are much higher for platinum jewellery. Buyers also need to be cautious when it comes to the purity of the metal and what it is mixed with.

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The Auto Industry Has A High Demand For Platinum

The vehicle shortage can be felt across the country. When the chip shortage is over, automotive dealers will be scrambling to make enough cars to meet the demand, and one of the things they when manufacturing new vehicles is platinum. Platinum is a massive component in catalytic converters, and is essential to building new vehicles. The potential demand for more platinum from the auto industry could bring the price of platinum to new highs.

But How The Mighty Can Fall

Given its superiority, its not surprising that the average cost of platinum has always been higher than that of gold. It makes sense its rarer, weightier, hardier, and thus more desirable.

But, in recent years, platinums been knocked from its top spot in the cost stakes by its once cheaper contender. Now at 1.4 times more expensive than platinum, white gold is the most pricey its ever been.

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