If you trade commodities, one of the things you’ll notice is that platinum is highly valued. Today gold is more expensive, but based on historical data platinum is usually more expensive. There are many reasons why platinum has long been highly sought after, from the obvious to the surprising.
Let’s take a look at the various reasons why platinum has historically been held at a higher value than gold.
Weight
Platinum weighs 60% more compared to 14k gold. That means a gold necklace weighing 10 grams will weigh 16 grams if it was in platinum so you’ll get more value for your money. Jewelry worth is based on how much metal there is in the object so that alone gives platinum the edge.
Even assuming the price of platinum and gold are the same, platinum still has the edge because it weighs more. If you’re investing in precious stones then it’s easy to see why platinum is valuable.
Purity
Platinum jewelry has a purity level of 95%, whereas 14k gold is less than 60%. 24k gold is of course 100% pure but majority of the time traded gold is of the 14k variant. What this means is you’re buying something comprised of 14 parts gold and the other 10 made up of other alloys. The same thing with 18k gold: it’s purer than 14k as it is 18 parts gold but the six are still made of alloys.
The 95% purity of alloy is greater compared to 14k or 18k, giving it greater density and adding premium to its price. So not only is platinum heavier as mentioned earlier but it is also purer.
Demand and Labor
Platinum costs more to process and turn into jewelry compared to other precious metals. Being more labor the metal commands a higher price and you can add its pliability and hardness.
We also have to consider the fact that platinum isn’t as widely produced as gold, and there rarer the metal the more expensive it becomes. Since platinum isn’t widely available and it’s labor intensive it’s no wonder it fetches a high price.
A Valuable Investment
What increases the value of an investment? Rarity of course, and that is where platinum has the edge over other precious metals. Supply isn’t as prevalent as gold so if you invest in platinum expect the value to go up.
Demand for precious go up and down depending on economic conditions, but even when conditions are ideal, platinum supply is nowhere near as prevalent as gold. Compared to gold and other precious metals, platinum is rarer than most and that alone makes it a good investment.
The fact that platinum prices are lower today makes it an ideal time to buy as you’ll be able to profit from it when the price goes up again.
Several Uses
Platinum jewelry is easy on the eyes and worth a lot of money, but its value is not confined to that. Platinum also has many industrial uses as it is malleable, ductile and can be used in various applications.
Platinum only melts at 3,215 F so it’s very durable. It doesn’t corrode as easily as other materials so it can be used in heavy duty situations. Its ability to conduct electricity is another advantage and makes it a good choice for commercial and industrial use.
Even though platinum is not as widely produced as other metals, it is still used in crude oil refining, glass manufacturing, wires, plating, chemicals, computers and lasers among others. Platinum is also used in some medicines, appliances, converters, spark plugs and more.
Autocatalyst
Platinum also plays a role in autocatalysts, the components in a vehicle that function as exhausts. These are comprised of metals that have been layered with platinum. An autocatalyst is very important because it cuts down the pollution that vehicles generate. During the procedure, more than 90% of the carbon monoxide is turned into carbon dioxide and water vapor.
Platinum Jewelry
Platinum doesn’t corrode or tarnish even when exposed to air or water. This is yet another reason why it makes for an ideal jewelry. Not only is platinum beautiful but it’s corrosion resistance means this metal is going to last.
Platinum also happens to be hypoallergenic so you don’t have to worry about getting skin irritation. Some people are allergic to gold so that gives platinum an advantage, as you don’t have to worry that your allergic reactions will be triggered.
Catalytic Reforming
This is a procedure whereby petroleum is turned into high octane products. Platinum plays a major part in this process as it is the catalyst which makes contact with napthras or the petroleum distillates. As the temperature rises, the petroleum turns into octane.
Conclusion
While commodity prices ebb and flow, the value of platinum cannot be doubted. Whether as an investment or used for manufacturing, platinum will remain a valuable and highly sought metal in the foreseeable future.