Recent developments in the global bullion market have seen an increase in the number of investors turning towards platinum bullion, in order to grow their existing portfolios. A lesser known form of investment, with a different set of mitigating factors, platinum bullion is a fine choice for investors who have some experience of the bullion market. Because it is in fact much rarer than gold, and is also used a great deal more in industry and manufacture, platinum has a more limited range of options for investment. Nevertheless, it has been growing in popularity due in part to its decline in price in recent years. But why should you buy platinum bullion? Read our tips below to find out.
Contrary to what many people believe, platinum is actually much rarer than gold. The annual gold mining yield is around 25 times higher than that of platinum, which makes this white sheened metal all the more valuable. In addition to less platinum being mined, the amount available for investment is significantly decreased by the demand for it in industry and manufacture. Platinum is used in car parts, computers, appliances and other electricals. It is also the most valued and sought after metal in the jewellery market.
The high demand for platinum in other markets means that, for investors, a piece of platinum bullion is very special. The only country to ever have used platinum in its currency is Russia, which also happens to be the only country to have stockpiled platinum bars. The number of national mints making platinum coins has steadily increased in recent years, but there is still a limited range of choice compared to gold and silver. Although some might see this as a disadvantage, it actually works in the favour of many investors, who benefit from owning a metal that is so rare and so in demand.
Although platinum is far closer in price to gold, in terms of volatility it can behave much more like silver. Whereas the fluctuations of the gold price are relatively small from week to week, the fluctuations of platinum can be quite dramatic, which allows experienced investors to take advantage of favourable prices. This makes platinum the ideal choice for those who have previously bought and sold silver on the market, and now wish to experience the platinum market in a similar way.
Of course, the factors affecting the platinum price are different to those affecting the silver price, so this is a much more complex market to navigate. In addition to the usual factors of economic and political uncertainty, the platinum price can also be affected by the demands of various industries, particular the automotive and computing sectors. This is something that investors should take into account when planning their purchases and sales, in order to get the most out of the growing platinum bullion market.
Palladium investment may seem like a niche area of the bullion market, but in fact an increasing number of bullion investors are turning to this highly rare metal at a time when other investment vehicles are becoming more and more uncertain. Owning physical palladium in the form of bars and coins is a more secure investment for the same reasons that owning physical gold, silver or platinum is: it is free from counterparty risk and so cannot be lost during an economic downturn. Just as with platinum bullion, though, palladium is affected by additional factors such as the demands of various industries. Read on below to find out why investing in palladium could be beneficial to your investment portfolio.
The Nature of Palladium
Palladium is part of the platinum family, and as such is structurally and aesthetically very close to platinum. Due to this, it is often mistaken for platinum by the untrained eye, even though it is often much cheaper than platinum. The reason for this is that is it far less dense, and so cannot be manipulated as much without breaking. Still, palladium is very popular in the same industries that platinum is, especially the jewellery sector where it is alloyed with gold to make white gold.
Both palladium and platinum are mined mainly in South Africa, Russia and the US, and both are highly in demand in the automotive and technology industries. This affects their price and makes them much more volatile than gold, and sometimes even more volatile than silver. Palladium is the rarest of the four investment metals, and it is said that all of the palladium ever mined could fit into a small living room. This may well be one of the reasons that demand for palladium is rising, as many investors are keen to purchase the rarest metals on the market.
A Recent Rise
As palladium is extremely rare, the variety of palladium bullion bars and coins available is very limited compared to gold and silver. This is not necessarily a problem when purchasing, but it does mean that liquidity is poorer for those wishing to sell. Despite this issue, palladium is gaining prominence in the market due to its impressive price rise in the first quarter of 2017, when it surged upwards more than any other precious metal. This has drawn the attention of many investors, as prices have been relatively low in recent years.
Palladium is likely to become a much stronger contender in the bullion market, due to its growing availability and recent volatility. Palladium bullion coins are growing in popularity, which means that more mints are likely to make them, and a number of suppliers have introduced new ranges of palladium bars. As demand increases, prices are likely to continue to rise in line with the growth of the bullion market in general. Palladium offers a lower cost way to enter the bullion market and benefit from the volatility of the platinum group metals.