The investing argument for gold is well-known. But the strong case for platinum is not as well-known. Precious metals have traditionally been recommended as a “safe-haven” asset and inflation hedge for investors. In this regard, gold is, without a doubt, the best commodity to invest in. However, nowadays, many people talk about it as being more valuable than gold, except that it has more solid supply and demand fundamentals. Its long-term diversification benefits have made it an ideal addition to precious metals allocations. It’s important to remember that throughout the previous 30 years, gold investors might have reaped superior risk-adjusted returns from their investments if they had added as little as 5 per cent to it. Platinum
So, what exactly is this metal?
There are few precious metals rarer than this. If you were to dip your whole body in an Olympic-sized swimming pool, you wouldn’t get more than up to your ankles in all this metal ever mined. At the same time, three of these pools could be filled with all the gold ever mined. A wide range of consumer groups highly prizes its unique benefits. While it is most often associated with high-end jewellery, its exceptional physical and catalytic qualities have led to its widespread usage in various industries. It is vital, challenging, and pliable. You can pound or push it into a form that won’t fracture or shatter. It is possible to make a wire more than a mile long from only one gram of metal. It is dense; a cube six inches on a side weighs as much as an ordinary human body.
The value of the metal as an asset has been questioned
The silvery metal is a one-of-a-kind investment opportunity that comes with significant benefits:
Historically, the price difference between it and gold has been rather substantial. The silvery metal’s price has only been below gold’s for an extended period four times in the previous 40 years. In each of these instances, the price increased significantly before significantly decreasing in the years that followed.
The silvery metal’s precious backing makes it a safe bet for anyone wishing to enter the precious metals investing market.
Its performance has a minimal link to those of conventional assets, and it thrives amid economic upturns. Even when gold is included, a portfolio with a metal proportion has better risk-adjusted returns.
The Investment Return on It Over Time
The silvery metal has consistently performed well as an investment over the long term, meeting the expectations of the private sector. Investors with a longer time horizon (five years or more) and a high tolerance for risk will find the precious underlying and industrial premium justified by the metal’s usage in manufacturing and supply/demand imbalances to be the most attractive aspects of this asset. Also, it is related to global megatrends like combating climate change, expanding access to healthcare, and ensuring the availability of clean water; thus, it is an excellent choice for thematic investing strategies. The significance of this metal in these movements is mainly unknown.
Interest in the metal
Two primary industries drive the demand for it. The most important single use of this silvery metal is in car exhaust systems, where it significantly reduces hazardous emissions. Long-term solid growth characteristics may be expected from this sector due to rising demand for automobiles in developing markets and tightening worldwide pollution requirements. Platinum, for instance, is used in the production of nitric acid for fertiliser; therefore, as the world’s need for food grows, it will grow.
Primary mining production and recycling supply, especially from the auto catalyst and jewellery sectors, make up the bulk of its available supply. The producer incentive price and the marginal costs of mining are the fundamental determinants of primary mining production over the long run.