Investing in platinum

Investing in platinum via The Silver Mountain is an interesting alternative to investing in gold or silver. While it is more common to invest in gold or silver, platinum offers unique properties and applications that make this precious metal valuable to both investors and industries.

Platinum is a durable precious metal. Although it doesn’t share the same long-standing history as gold and silver, it is widely used in industrial sectors and technologies. Due to its scarcity and strong properties, platinum is especially popular in industry and the jewelry market. It is also highly resistant to corrosion.

Why invest in platinum?

Unlike gold, which is often used as a hedge against economic downturns, platinum is primarily valued for its industrial demand. Platinum is essential for catalytic converters in diesel vehicles, which greatly influences its price due to the resulting scarcity.

Platinum is also interesting for investors looking to diversify across multiple precious metals. Its price is less sensitive to monetary policy and more influenced by industrial market conditions.

Industrial uses of platinum

Platinum plays a unique role in various industries. It is commonly used in diesel vehicle catalytic converters due to its ability to reduce harmful emissions. This makes it an essential component in the automotive industry, especially for improving environmental standards.

Besides this, platinum is in demand in the jewelry sector and has applications in various high-tech industries. Its resistance to high temperatures and corrosion makes it highly versatile and valuable.

Since platinum is indispensable in many modern applications, demand remains high. This strengthens its value and makes it an attractive addition to your investment portfolio.

Buying platinum: coins or bars?

You can buy platinum in the form of coins or bars. In the Netherlands, platinum bars are subject to 21% VAT. Platinum coins, on the other hand, are VAT-exempt. This VAT cannot be reclaimed when selling. Therefore, platinum coins are a more attractive option for many private investors.

If you want to invest in VAT-free platinum coins, popular choices include the Maple Leaf, the Philharmoniker, and the Platypus. These coins are produced in limited quantities.

What determines the price of platinum?

The price of platinum is directly linked to the international market rate, which fluctuates daily based on supply and demand. Unlike gold, which typically rises during economic uncertainty, the price of platinum is mainly influenced by industrial conditions.

Platinum demand increases with a growing automotive sector and the implementation of environmental regulations. It is widely used in the production of catalytic converters to reduce vehicle emissions. However, its value is less predictable than gold’s, as it depends more heavily on industrial dynamics.

Key advantages and disadvantages

Platinum is a unique metal with distinctive properties. It is rarer than gold and therefore especially attractive to investors looking for a valuable asset. Its scarcity and strong industrial demand make platinum both valuable and versatile. Moreover, it adds extra diversification to your portfolio.

When investing in platinum, be mindful of the VAT disadvantage associated with platinum bars. Still, platinum remains a smart investment choice. Browse our current range of platinum coins and bars, and feel free to contact us for personal advice.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.