Is it better to invest in gold or platinum? You're not the only one to ask this question. As more and more people turn to commodities as a safer investment than stocks or bonds, the question of gold versus platinum becomes increasingly relevant.
Precious metals can help you diversify.
Investing in precious metals is a great way to round out your investment portfolio, and the resulting diversification may help you to sidestep troubles in the stock market. While precious metals may not yield the same returns that you can get in other investment types, they're a fairly safe investment and can be backed by physical commodities, unlike stocks. Precious metals don't pay interest, so they shouldn't serve as your primary investment vehicle, but they can seem like a safe harbor in times of turmoil.
Check current performance indicators before you invest.
The question of investing in gold or platinum depends, in part, on current market performance. In late 2008 and early 2009, gold prices spiked to over $1,000 per ounce. Historically, that's extremely high for gold, and it was explained away as a knee-jerk response to fears in the investment arena.
However, relative pricing does play a part in whether or not to invest in gold. If you can get a good deal in gold versus platinum, gold might be a good choice. On the other hand, if platinum is trading at a discount to gold; an occurrence that has happened only 122 days in a 22-year history; platinum is the clear winner.
Decide how much you can invest, and how much you want.
Generally speaking, gold is less expensive than platinum. Platinum can trade as much as twice gold's rate, and even when it's not trading at double the price, it's still an extremely valuable and expensive investment vehicle. If you don't have a lot to invest, gold might be a better investment option, as you can get more for your money. However, gold can price itself out of the market, so consider the relative pricing of both precious metals before you choose your investment. Ultimately, if you have a lot to invest, diversify and purchase both.
Platinum is rare, valuable and in-demand.
Platinum has three important things going for it: it's rare, valuable and in demand. Platinum is 30 times more rare than gold. It takes up to 10 tons of ore to produce 1 ounce of platinum, and that's not likely to change any time soon. With rising demand, as new and improving technology requires more and more platinum, it's becoming increasingly more valuable.
Platinum dropped in price in 2008 when auto manufacturers unloaded large platinum supplies, but it has traditionally had a value far higher than gold. As demand continues to increase, platinum values might go up. However, there is no such thing as a sure investment, so you will need to evaluate the whole market picture, not to mention your portfolio, before you invest in either gold or platinum.