Why Is Platinum Cheaper Than Gold?

Platinum bars or ingots background. Precious metals. 3D illustration Maxx-Studio/Shutterstock

Owning precious metals like gold and silver is a prudent solution when you want to get the most out of your long-term investments. However, more people are looking toward platinum products as an alternative way to enhance their portfolios.

Unlike fiat currency, platinum shows resilience during an economic downturn. Why is this precious metal so attractive to many investors, and what can you do to obtain it?

What Affects the Price of Platinum?

Because many modern industries depend on platinum as an essential ingredient in their products, numerous factors influence its value.

The first factor to consider is the available supply of this precious metal. Most of the world’s platinum supply comes from South African mines. However, political developments and worker strikes often put the stockpile at risk.

Depending on the results of these conflicts, the price of platinum can fluctuate.

Second, platinum is a crucial asset to the auto industry. Engineers use platinum as catalytic converters during the manufacturing process. As global markets like China continue to invest heavily in new cars, platinum’s price fluctuates.

Platinum also serves as a durable industrial metal in other applications. New technology uses platinum to reinforce medical equipment, like pacemakers. Engineers also use this metal to reduce the output of harmful gases from diesel engines.

Platinum Jewelry

Platinum jewelry has become increasingly popular in the last few years. The World Platinum Investment Council (WPIC) noticed a steep rise in the demand for this product in the Indian and Chinese markets. As a result, the WPIC expects platinum’s jewelry demand to grow to 14 percent in the coming years.

Jewelry that contains platinum loses very little of its quality over time. Products like white gold jewelry may lose some of their metal when damaged. However, those who invest in jewelry with platinum can polish the surface without tarnishing the metal.

The Platinum Investment Industry

Some people buy platinum for its beauty, while others invest in its many industrial applications. A relatively new platinum market emerged in the last few decades, attracting many new investors.

Platinum coins and bars are more popular than ever among the precious metals community. Most well-informed investors understand that this product could be essential to their portfolios.

Like yellow gold and palladium, this alternative precious metal protects against inflation and economic crisis. Financial forecasts indicate that the price of platinum could continue to rise as the high demand outweighs the supply.

What Affects the Price of Gold?

Some people view gold as an ultimately profitable investment. For centuries, gold served as the currency for many nations and was a status symbol among the affluent.

In most places, gold demand indicates how well an economy performs. For example, many thriving economies spend more money on gold jewelry.

The gold standard also protects investors against currency depreciation and volatile markets.

Why Is Platinum Cheaper If It Is Much Harder to Find?

Platinum prices can be much lower than those of other precious metals. However, this ratio can change rather quickly.

Less platinum equals higher prices, and more platinum equals lower prices. Platinum is a rare metal that miners must work tirelessly to extract from the earth’s crust.

Workers remove about 200 metric tons of platinum a year from the earth’s surface, compared to the nearly 3,000 metric tons of gold.

Despite these numbers, platinum’s supply is relatively high at this writing, and many companies are only now waking up to its potential industrial uses. Until the industrial demand for platinum outweighs production, it could remain less expensive than gold.

Still, rising global markets may encourage manufacturers to produce more items like catalytic converters and surgical tools. As a result, the value of platinum could skyrocket overnight.

Platinum vs. Gold: Which Is More Valuable?

Gold is your safest bet when you want to invest in precious metals that retain much of their historical value. Many people believe that gold’s stability makes it a good investment. Nevertheless, analysts consider platinum to be more valuable than gold.

In a stable market, platinum can overtake the price of gold. However, as previously mentioned, platinum and gold values depend heavily on major producers’ output.

Platinum Price Trends Compared to Other Precious Metals (2020–22)

How do other metals stack up against the price of platinum and gold? The price differences between these commodities tend to follow similar trends: As one metal becomes more expensive, others follow suit.

However, these trends indicate that some metals rise and fall more dramatically than others.

Silver

Since the second quarter of 2020, silver has been more expensive than gold and platinum. This phenomenon may be due to the effects of COVID-19. Many investors began buying up this product as the stock market dropped significantly.

However, since March 2022, silver prices have continued to return to pre-2020 levels.

Palladium

Palladium is also more valuable than gold and platinum. It briefly fell below the price of gold in November 2021, but continues to trend back up.

Palladium is a high-demand precious metal in low supply. We can conclude that its rarity contributes to this price difference.

Is Buying Platinum Worth It Right Now?

Just like when dealing with traditional stocks, it’s wise to buy low and sell high.

Platinum is currently at one of its lowest prices since 2020, and some may consider purchasing these items before platinum demand increases. Still, every investor’s situation is different.

Gold Rings, Alloys, and Other Commodities: Are They Worth Anything?

Gold rings, bullions, and bars are some of the most attractive commodities for investors worldwide. Some of the most recognizable alloys include white gold, yellow gold, and rose gold. Still, you may wonder whether it is worth investing in these items.

For example, platinum and white gold are different in many ways. How can you be sure your money is going toward a suitable investment? Let’s take a look at each of these products more closely.

Platinum and White Gold

White gold contains around 75 percent pure gold. Jewelry manufacturers use this metal regularly in their products, and its naturally white surface distinguishes it from other gold alloys that contain yellowish metal.

For some, it may be challenging to differentiate between platinum and white gold. For example, gold and platinum contain silver-colored metal that is ductile and malleable. However, buyers may notice some key differences between the two.

Unlike platinum, white gold is difficult to dent or scratch. Its durable white metal surface contains trace amounts of silver, copper, and palladium.

In addition, wearing a platinum ring may be safer than wearing a white gold ring. White gold sometimes contains nickel, which can cause allergic reactions for some.

Platinum and Yellow Gold

Yellow gold is another alloy that contains metals like copper and zinc. Customers will notice a few differences between this product and white gold; however, people sometimes mistake this yellow metal for having a higher purity.

Both alloys have approximately the same market value. Choosing between these two options boils down to personal preference.

The Oxford Gold Group helps investors protect and grow their wealth by purchasing physical gold and silver for their IRAs and for home delivery as effortlessly and securely as buying bonds or stocks. That’s why investors have turned to the security of gold and silver and the Oxford Gold Group. Call 833-600-GOLD or visit OxfordGoldGroup.com to receive a complimentary copy of “Your Precious Metals Investment Guide.”

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