In today’s world, a lot of people consider platinum as a significant and viable investment. A lot of people identified the precious metal as a “cheap” precious metal. It does not mean it is not a good investment. In fact, it is even cheaper. So the big question is it a good time to buy, sell or hold bullion like platinum eagle coins or bars?
Why do you need to invest in platinum?
Let us start with the basics. Where can you usually use it? The answer is a lot of things. According to most experts, one-fifth of all manufactured items contain platinum, although this statement is hard to prove. It is used in the chemical industry as a great catalyst.
It is also used in electronics as a component for hard drives, in fiberglass manufacturing, in refining petroleum, in making medical equipment like catheters, stents, neuromodulators, guidewires, pacemakers and defibrillators.
It is also used in cancer treatments, medical implants, in various types of industrial sensors like thermocouples in furnaces, carbon monoxide detectors or exhaust-gas control systems, fertilizers, coating for spark plugs or jet-engine blades as well as a component for fuel-cells. But two of the most significant uses of platinum are in the automotive industry and jewelry. It accounts for almost 80% of the annual demand.
To know more about this valuable metal’s common uses, visit https://sciencestruck.com/common-uses-of-platinum.
In 2017, the yearly demand for this metal was slightly down at 7.8 million ounces and the supply of almost 8 million. According to the World Platinum Council’s projection for 2018, the supply will fall and the demand will rise, with the remaining two will be in equilibrium.
More or less 75% of the supply comes from the mining industry and at least 25% are from recycled platinum. Of the mined supply, two-thirds are from South Africa. The fate of this metal is decided by a country in a way that there will be no other commodity except for cobalt.
The decline in diesel demand also hit the industry very hard. It has always been the change of point of view towards diesel engines in the United States and Europe because of car manufacturers like Volkswagen has been the thorn in the platinum industry’s story.
It is used as catalytic converters and most experts projected its use to fall in the coming years because of the changes in regulations as well as the dramatic rise of electric cars. It means that platinum is struggling to find a new bid. At this point, Western Europe, the use of diesel accounts for about 15% of the precious metals used.
If diesel engines are starting to go down, then it is not the disaster for the platinum industry that most people expected to see. But despite all of this, when it comes to prices instead of reflecting the demand and supply equilibrium as well as the anti-diesel narrative, the industry spent the last eighteen months trading between $1,040 and $900 per ounce. While other precious metal assets go up and down, it has been very stable.
Is the platinum industry in a dramatic rally?
The answer is maybe, maybe not. We can’t tell how the price of platinum eagles and other types of bars or coins will go, but the one thing is sure, according to the reports, the trend is steadily rising when it comes to its prices. The last time the industry was in the buy zone was the late 90s when the price of platinum was more or less $400.
Over the next decade, it rose to over 700%. According to recent price market, this metal is more expensive than silver or gold. Everyone knows this, well not everyone, but most of the investors. According to past prices, platinum is around 33.33% more expensive than gold. That is not the case now. Gold stands at $1,335 per ounce, more or less two times more expensive than platinum.
The price of platinum
Every expert knew that it had a good run in early 2000, during the 2008 recession, during the rebound, and the post-2011. The price is steadily growing since then on. In 2016, it is priced at $810, a lot higher compared during the 2008 recession. A lot of experts predict that it will top $810, at worse; it will go down at $750. The risk of buying in today’s market is at 15%. A lot of forecasters believe that the price will go down, but honestly, we can’t see the price going below $750.