Platinum is one of the most versatile of precious metals. However, unlike gold, it is an industrial metal and has a huge demand in the automotive, computer, and petroleum & chemical industries.
Although it’s traded around the clock like gold and silver, investment accounts for a very small part of the metal’s overall demand. If you have been investing in precious metals, here are some of the reasons you should consider including Platinum in your portfolio.
The major demand for Platinum comes from the automobile industry. It is mostly used in catalytic converters in engines. Industry experts argue that as the world moves towards electric cars, Platinum’s demand would fall, but there’s yet a long road ahead before electric cars completely take over.
Even then, Platinum has also found its use in the medical industry where it is used in making medical equipment like catheters, defibrillators, pacemakers, stents, etc. Experts at stores like Gold Stackers believe that Platinum is versatile and is used in so many industrial processes that we expect the demand to continue in the foreseeable future.
Reduce Overall Investment Risk
Platinum moves in the opposite direction with stocks and bonds and therefore acts as a better hedge than bonds and stocks. The losses that you experience in the stock market can significantly be offset by the gains experienced in the platinum market.
Speculating on Platinum
Platinum is a volatile metal. That means the prices rise and fall quickly and significantly too. This makes it a good market to speculate. As an investor, if you can take advantage of these moves, you will gain a good deal. Provided, of course, you’re on the right side of the platinum market at the right time.
Platinum is even rarer than gold. That means far less of the metal is pulled out by mining at a time, thus creating upward pressure on the prices. Moreover, only two countries currently produce Platinum- South Africa and Russia. This raises the possibility of a cartel-like action which can significantly raise prices artificially.
Platinum’s Green Metal Credential
The world is gradually moving to a ‘Hydrogen economy’ where world governments are slowly waking up to the fact that hydrogen can play a key role in power generation and transportation, thereby decarbonising industry and creating a significant and better climate in the future.
In a recent report by the World Platinum Investment Council, Platinum not just plays a crucial role in generating green hydrogen but is also used in fuel cells for fuel cells electric vehicles. As an increasing number of national governments recognize the need for hydrogen as a key fuel in power and transportation requirements, the demand for Platinum is set to rise.
If you are considering investing in Platinum, beware of the risks associated with volatility, price drops during economic uncertainty can damage your portfolio if you invest heavily in precious metals.
If you’re new and like some advice regarding the same, you can talk to the experts at websites like Gold Stackers to guide you through the process. The trick to success is to know your goal and risk profile before jumping in.