Platinum vs. gold

Which precious metal is better to invest in?

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Do you already have gold investments?

two platinum bars and three gold bars

Both gold and platinum are popular precious metal investments that allow investors to diversify their portfolios – while being able to physically hold the asset in their hands.

And while you can easily buy gold and platinum online through the U.S. Mint or through precious metal dealers, it’s important to understand how each of them functions and perform as an investment.

Both gold and platinum let you own a useful (and valuable) precious metal in your portfolio, but one has historically performed better than the other as an investment. And there are more functional use cases for one of these metals in the real world.

We’ll break down the similarities and differences between platinum and gold, including what types of investments are available, how they have performed as an investment and the pros and cons of investing in each.


Key insights

Platinum and gold are precious metals that can help diversify your investment portfolio

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You can purchase physical gold or platinum or invest in spot ETFs or futures contracts

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Both gold and platinum are volatile assets that carry a risk of loss

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Gold is more popular and valuable than platinum and has better long-term returns

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Investing in platinum

Platinum is a popular precious metal that has various industrial applications. At one point, it was the most expensive precious metal on the open market. You can invest in platinum in various forms, including bullion (coins and bars), ETFs, platinum-related stocks and even futures contracts.

While the price of platinum is lower (per ounce) than gold, platinum is rarer than gold overall. There is about 30 times less platinum available than gold in the world, according to the World Platinum Investment Council.

But rarity is only one aspect of investing in precious metals, and all metals are subject to market forces of supply and demand. There is a much larger demand for gold, which is why it has continued to outperform platinum as an investment over the long term.

How to buy platinum

There are several ways to invest in platinum.

  • Physical platinum. You can purchase physical platinum from online or in-person precious metal dealers. You can also purchase directly from the U.S. Mint. You can buy physical platinum as coins, rounds or bars. You can choose to have the platinum bullion shipped to your home for safekeeping or keep it with a custodian that offers insured storage of your purchase. Owning physical platinum does require additional costs, such as shipping, insurance and purchase fees.
  • Platinum spot ETFs. If you don’t want to own physical platinum but still want to invest in it, you can purchase a platinum spot ETF. These exchange-traded funds own physical platinum and allow inventors to purchase shares in the fund to benefit from the price of platinum itself. These funds are available through most online brokers and investing apps, allowing quick and easy purchases without the hassle of shipping or storing platinum itself.
  • Platinum-related stocks. Mining and processing platinum for use takes work, and companies that perform these tasks are occasionally publicly traded. You can invest in precious metal mining companies that mine and process platinum and benefit from the profits of those companies (but also hold the risk of losing money if they don’t produce a profit).
  • Platinum futures. You can invest in platinum futures contracts, which track the price or volatility of platinum based on a future date. These contracts are an agreement to buy or sell platinum at a future date at a preset price. Futures investing may involve using leverage, which can increase the risk of the investment substantially.

Pros and cons of investing in platinum

Pros

  • Diversify your investments
  • Can own physical platinum or stocks/funds
  • Many industrial applications

Cons

  • Volatile investment
  • Has underperformed gold and some other traditional investments
  • Less liquid market than gold for buying and selling

Investing in gold

Gold has been a form of currency and an investment for thousands of years, with the first coins beginning circulation as far back as 500 B.C. Gold is the most popular precious metal investment, with a market capitalization of over $14 trillion.

Gold is known as a “safe haven” asset, and investors typically turn to gold during times of economic and political turmoil. Gold is also sought after during times of high inflation, as it has historically been seen as a hedge against rising prices.

Many investors choose gold as a way to diversify outside of traditional markets, and some choose gold to own a physical asset they can take custody of. There are several ways to invest in gold, including physical gold, gold stocks and ETFs, and gold future contracts.

How to buy gold

You can invest in gold in various ways, including:

  • Physical gold. Physical gold is available from gold dealers as well as the U.S. Mint. This allows you to purchase gold and store it in your home or another secure location. You can purchase gold bullion, such as coins, rounds or bars. Most physical gold is priced per ounce. If you want to take custody of your gold investment, this is the only option.
  • Gold spot ETFs. You can invest in gold without physically owning it by choosing a gold spot ETF. These exchange-traded funds back the issued shares of the fund with actual physical gold that is stored in a secure vault with insurance. This gives investors exposure to the spot price of gold with backing from the physical asset itself. You can buy and sell gold ETFs through most major brokers and investing apps.
  • Gold mining stocks. Gold mining is a big business, and you can invest in gold mining and processing companies directly by buying stock in these companies. This gives you exposure to the profits from gold mining operations.
  • Gold futures. Gold futures trading allows you to own a contract to buy or sell gold at a predetermined future price. Futures trading can be very volatile and is an advanced investment strategy. It may be valuable to work with a licensed financial advisor before choosing to explore gold futures investing.

Pros and cons of investing in gold

Pros

  • Time-tested alternative investment
  • Tends to perform well in times of economic turmoil
  • Very liquid market with many available buyers and sellers
  • Can own a physical asset that is universally accepted globally

Cons

  • Has not outperformed the stock market historically
  • Higher risk than other “safe-haven” investments such as bonds
  • Can be costly to store and insure physical gold

Investing in platinum vs. gold: Price and liquidity

Gold and platinum are two of the most valuable precious metals to invest in. Both come in various forms, such as coins, rounds and bars, and both can be accessed with stocks and ETFs as well.

Gold vs. platinum price

Gold is by far the more popular asset, with a market cap of over $14 trillion, while platinum only has around a $250 billion market cap. Gold has also surpassed platinum in price per ounce, trading for over $2,000 per ounce as of March 2024, while platinum is trading for just under $1,000 per ounce.

This is an interesting dichotomy, as platinum is much more rare than gold and also has more industrial use cases, such as being used in vehicle catalytic converters to help lower emissions. But since gold has such a rich history and is universally accepted as an investment and store of value, it has far more market demand, resulting in higher prices.

Part of the difference may be accessibility as well. “Platinum has less options to access in a brokerage account like gold,” said David Rath, chief investment officer at Continuum Wealth Advisors in Saratoga Springs, New York.. “It also suffers from performance issues like any other commodity, platinum can do well under certain conditions, but gold has a more appealing general use case.”

Gold vs. platinum liquidity

Gold and platinum are both traded online via spot ETFs and stocks. Both offer futures contract trading for more advanced investors.

However due to a much higher demand, gold has far more liquidity than platinum markets. This means there are more buyers and sellers available for spot ETFs and futures contracts, making it easier to buy or sell gold on most investing platforms.

More liquidity also means getting a fair price for your asset, as there are more buyers and sellers available to transact at your listed price. This keeps fees low and gives confidence to investors that they can buy or sell larger amounts of gold if needed without issue.

Do you already have gold investments?

FAQ

Which is more valuable: platinum or gold?

Gold is more valuable than platinum, currently trading at over $2,000 per ounce, while platinum is currently trading at under $1,000 per ounce. This value difference remains even though platinum is 30 times more rare than gold. This is due to gold’s longevity in the market and a higher demand from investors.

How can I start investing in platinum and gold?

The easiest way to invest in platinum or gold is by purchasing a spot ETF. These funds own the physical asset you are investing in and store and insure it for you, while all you have to do is purchase the ETF to gain exposure to the price of gold or platinum. Another way is to purchase platinum or gold bullion directly from the U.S. Mint or through an online gold dealer. This allows you to own physical gold or platinum coins or bars that you can take custody of.

Can I invest in both platinum and gold?

Yes, you can invest in both gold and platinum by purchasing the physical metals themselves or investing in both gold and platinum spot ETFs. You may have different aims for each investment and can mix and match however you choose.

Bottom line

Investing in precious metals such as gold or platinum allows you to diversify your investment portfolio while taking custody of a physical asset. You can also choose to simply add gold or platinum ETFs to your portfolio for a simpler investment strategy. While gold has been a long-term investment winner, platinum has not held its value as well as gold for the last 20 years and is a more volatile investment choice.

Investing in precious metals can be a good strategy, but only if you have a rock-solid investment plan in place. Meeting with a licensed investment advisor before allocating funds to any precious metal can be a good idea.


Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. World Platinum Investment Council, “World Platinum Investment Council.” Accessed March 11, 2024.
  2. United States Mint, “Platinum Coins.” Accessed March 11, 2024.
  3. World Gold Council, “Money and Gold.” Accessed March 11, 2024.
  4. Companies Market Cap, “Gold’s Market Cap.” Accessed March 11, 2024.
  5. GoldPrice.org, “Spot Gold.” Accessed March 11, 2024.
  6. PlatinumPrice.org, “Spot Platinum.” Accessed March 11, 2024.
  7. Macro Trends, “Platinum Prices - Interactive Historical Chart.” Accessed March 11, 2024.
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