Understanding The Value Gap Between Platinum & Gold
Both gold and platinum are well-known for having tremendous value as precious metals. Even those who may never have held a piece of gold can likely tell you that a yellow gold ring or a platinum ring has way more value than a silver ring.
Like other metals, gold and platinum are also often utilized precious metals in jewelry and investment opportunities. Each also has its unique quirks such as gold being used as a medium of exchange and platinum having high industrial potential.
Between the hype surrounding platinum and gold, as well as their obvious value, they’re often compared. You may be thinking about how gold jewelry could possibly stand up against platinum rings, for example.
After all, whenever you look at a hierarchical chart, you never see anything above gold but platinum. So, how could there even be a comparison?
The information below will most certainly clarify why you shouldn’t turn your back on the gold mines just yet as more platinum doesn’t necessarily mean more value.
If you were to evaluate purely based on material worth in the absence of other variables, there is no alternative precious metal that can rival the platinum price. This includes rose gold, white gold, and standard yellow gold.
Much of this comes from the sheer rarity of platinum. It has a gleaming white hue, which has come to represent both excellence and wealth. While platinum demand may be non-existent as a medium of exchange, its broad applications pick up the slack.
For example, it provides a base for catalytic converters in the automotive industry. Additionally, applications such as computers, medical equipment, engines, and even the petroleum sector all depend on platinum to remain afloat.
Benefits of Platinum
Apart from being able to say you got your hand on a rare precious metal when you enter the platinum market, consider these advantages:
- Unlike white gold, for example, platinum has no rhodium plating requirement, thanks to its naturally strong composition.
- Yellow gold and white gold are known for being pretty dense materials. Even so, platinum is known for being 60% denser than yellow gold and about 20% denser than white gold. That doesn’t mean it can’t wear with time, but expect it to look fresh much longer than your standard or white gold jewelry.
- Rose gold and platinum share this similarity. Both precious metals take on a frosted look over time, which is known as patina.
- Platinum happens to be hypoallergenic, which is tremendous for those who may have sensitive skin.
While platinum prices are the highest in the absence of extreme variables, gold is one of the most popular precious metals out there. In fact, it tops all its counterparts where investment interest is concerned.
Gold prices don’t stop investors from buying into it as they aim for portfolio diversification. The fact that gold can also be bought in so many forms and still serve the purpose of an inflation hedge makes it highly attractive.
This is where platinum and gold differ heavily. Consider whenever there is an economic crisis. What do investors do? They want to protect their holdings, so they look to precious metals and gold is high on the pecking order.
One of the only concerns is the fact that the growth potential for gold is limited. Still, half of gold’s demand is in the jewelry industry so it’s not all about the investment numbers.
Benefits of Gold
Perhaps you’re wondering if you should consider gold jewelry, whether it be white gold, rose gold, or the typical yellow metal variation. Here are some benefits to remember:
- Platinum and white gold in particular are very durable. While platinum wins, the additional denseness of white gold over its standard variation makes it a solid option.
- Sometimes, as history has shown, platinum’s price fluctuates. Gold, on the other hand, seems to be able to maintain a stable value over time.
- The different grades of gold allow for variety in the kinds of jewelry or other ornaments that you may be interested in.
- Gold being softer than platinum makes it much easier to work with. Even white gold, as dense as it is, makes for a pretty easy resize and repair job when compared to its platinum counterpart.
Gold Vs. Platinum Jewelry
Sometimes, when you see a silver-colored metal, it can be difficult to identify whether you’re looking at platinum or white gold. Just in case you’re ever confused, here are some head-to-head differences that can help you to separate the two.
Platinum’s greater resistance to wear means that you can usually maintain its appearance by cleaning it at home.
Rose and white gold, on the other hand, lose their shine faster, become yellowed, and will likely need the intervention of a professional jeweler to restore them.
If you want less maintenance effort, then platinum is most certainly the way to go.
Both gold and platinum are very hypoallergenic. However, gold is often mixed with other materials such as nickel, which can present allergies. Platinum, on the other hand, is way less likely to have such an effect.
Expect to have your platinum pieces maintain their appearance and look for a much longer time. If you have diamond rings, for example, that you want to have with you for a long time, then platinum should be perfect.
Gold and Platinum: The Manufacturing Industry
Typically, the auto industry is a huge consumer of platinum, since it is used in catalytic converters, as well as other components. In fact, over half of the demand that the rare metal sees can be attributed to these applications. It’s very adept at converting harmful vehicle emissions into cleaner waste.
Beyond wedding rings and other jewelry types that gold is typically used in, it happens to be a staple of electronics, architecture, and art. You tend to find that computer chip circuits are made up of tiny gold wires. Gold is corrosion resistant and conducts electricity well, meaning it can protect electrical components such as copper very well.
Should You Buy Platinum and Not Gold Rings?
Platinum’s prices vs. gold’s prices will factor heavily into this decision alongside what you may prefer visually or from a durability standpoint.
If you want an engagement ring made of gold, then you can pretty much expect a consistent value over a period of time.
Naturally, platinum is more valuable than gold. However, the pure metal sees heavy price fluctuations because of demand. That means that while it will usually cost more, an absence of high demand will see the price plummet noticeably.
Why Do People Visually Compare Platinum and White Gold?
The platinum vs. white gold comparisons happen all the time, and it’s mostly down to the visual similarities that the two precious metals share. Either can be a status symbol, but you’ll often see platinum associated with greater excellence than gold is.
Price differences are also much larger than you may think. Don’t be surp[raised if an engagement ring made of platinum costs you as much as 5o% than one made of white gold.
Generally speaking, it’s hard to say that one or the other is better. Rarity and value are set in stone, but personal preference is not. Perhaps you’re on a budget and would prefer the cheaper option.
Alternatively, maybe your lifestyle is a little more on the active side and durability is what matters to you the most.
The Fall of Platinum Prices in the Precious Metals Hierarchy
As indicated before, the presence of less platinum isn’t always enough to keep its price above that of gold. Previously, the metal had an incredible price point of $2,200 per troy ounce. Those high levels were last seen in 2008, but even as late as 2013, it did achieve a $1,600 level.
Naturally, a drop in demand caused the decline, but what caused the demand to fall? Much of it boils down to the popularity of palladium over the last decade. Except for diesel vehicles, palladium was found to do a better job where catalytic converters are concerned. Platinum hit a low of $600 per ounce, though, in 2021, it managed to get back to $1,200/oz.
The pandemic at its high also played a part since mining platinum pretty much stalled. So, while gold maintained its value, platinum dipped by almost 75% from its highs.
Recovery of the Platinum Price
For those who may be worried about the trend of platinum prices, there’s a bit of a silver lining as the World Platinum Investment Council indicates that not only has the metal made great strides in recovery, but it is expected to continue to appreciate.
While this is true, compared to its historic value, the price point continues to be low. Perhaps this means it’s a great time to invest in the material.
Which of the Two Metals Is More Precious?
This is another very common comparative question that also doesn’t have as straightforward an answer as many people may think.
Platinum is pretty rare in the earth’s crust. Gold, while it has some level of rarity, is not as rare.
On another hand, gold is very liquid in the trading market world, yielding some of the highest volume commodity trading in the world.
A recent comparison had gold at $1,897 per ounce with platinum standing at $1,175 per ounce, meaning that the numbers currently have platinum being less valuable than gold.
There’s also the durability and long-term reliability side of things that platinum wins. So, the real question here is what factors appeal most to you?
How to Venture into Precious Metal Investments
The easiest way to invest in either platinum or gold is to simply purchase some of the commodity. Most well-informed investors do this by securing bullion or bullion coins. Essentially, these are large amounts of the metals in the form of coins that you can purchase from precious metal dealers, institutions, coin merchants, and brokerage companies.
Perhaps you’re more of a equities and traditional stocks kind of person. In that case, you can use exchange-traded funds (ETFs), equities, or mutual funds to invest in the metals. This is a more liquid way of going about things and it doesn’t require you to figure out how storage is going to work.
Do You Have to Buy Platinum?
Perhaps if you wish to diversify your portfolio, you can make a strong argument for needing to buy platinum. However, if you’re just starting on your investment journey, then you may want to consider going for gold and silver, which are a bit more on the stable side.
Platinum is indeed predicted to return to higher heights but the jury is still out on the feasibility of such a gamble.
How to Select the Most Appropriate Precious Metal to Invest in
If you’re comparing platinum vs. gold or any other precious metal, begin by considering what your investment goals are and what the market moves look like at any time. For example, if there’s a period where industrial and manufacturing sectors are showing expansions and there’s an economic improvement, platinum may be a good short-term bet with potentially higher returns than gold.
Can You Definitively Say Platinum Is Now Cheaper Than Gold
At the time of writing, the price of gold happens to be higher than that of platinum, thanks to a combination of pandemic-based platinum mining blockages and the rise of palladium. Typically, you’d find gold being the cheaper of the two, and based on projections, this is likely to become the case again.
Platinum is most certainly rarer than gold and it’s more durable too. However, gold’s ability to maintain its value has led to it now being the more expensive of the two. Before investing in either, think of the KPIs that align with your goals.
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