What to Know about Investing in Precious Metals with Platinum

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Platinum is the rarest and most expensive of the precious metals and while gold and silver are usually the first options a person investing in precious metals considers, platinum can be an excellent choice. In addition to being rare, platinum is such a good investment because of its numerous industrial uses such the automobile industry where it is used to block harmful toxins from entering both the car and the environment. It is even used in certain cancer treatments due to its ability to attack a tumor’s rapidly growing cells. Here are some of the things that anyone thinking of investing in this amazing precious metal should know.

Rarity
As mentioned, platinum is so expensive because of its rarity. However, simply saying that platinum is scarce does not do enough to convey the extent of its rarity. In a normal year, only 5 million troy ounces of platinum will be produced from mines. For an accurate comparison, take a look at the production of gold which is almost 82 million ounces a year or the production of silver at around 547 million ounces annually. When compared to these other metals that are considered rare, it becomes almost instantly apparent why investing in precious metals with platinum is an excellent idea.

Physical Platinum
One of the best options for investing in platinum is to purchase physical platinum. A simple search will find several sources that a person can purchase platinum from, usually in the form of one or more 10 ounce ingot. The important thing to remember is that anytime a person is investing in precious metals, they must choose the supplier carefully. Most of the suppliers will send the platinum using a secure carrier. They will charge the market price as well as a small additional fee to cover the cost of operations like minting.

EFTs
If someone is concerned about having physical platinum in their possession, another great option for investing in precious metals is to use exchange traded funds. These funds are mostly based on the on the prices of platinum which means that as its value rises, so will the value of any investment in an exchange traded fund. There are several options to invest in platinum ETFs including the ticker name PHPT on the New York Stock Exchange and the ticker symbol LSE on the London Stock Exchange.

Bank Accounts
Platinum is unique in that Swiss banks offer another method of investing in precious metals with platinum. Certain banks have specific accounts that use platinum as if it were a foreign currency. What this means is that if an investor chooses to open one of these accounts, they can conduct their business using platinum as their payment method. One thing to remember, however, is that with this method an investor will not hold any physical platinum themselves. Instead the amount in their account is a claim for a part of the bank’s deposits. This option shows the large amount of liquidity of platinum.

Volatility
Although platinum is considered one of the best methods for investing in precious metals, there are some cautions to take. It is important to remember that although it is a great investment, it can be very volatile. Back in March 2008 one troy ounce of platinum was worth $2,252 but then because of production problems it dropped to $774 by November 2008. Since then the problems have resolved to some extent and its value has continued to increase reaching $1,462 in September 2013. Despite these large variations, platinum has a history of good performance and when a person makes the right investment decisions, it can be an excellent asset.