Platinum's relative scarcity in the face of newly discovered and ever-increasing uses makes for an attractive 21st century investment. Platinum's historical price performance and its unique fundamentals are attracting an increasing number of informed investors. Sophisticated investors have long recognized the importance of owning precious metals as a means of stabilizing their financial portfolios. Precious metals tend to appreciate in value during periods when other financial assets are declining. Political turmoil, currency crises and inflation are just a few of the reasons investors seek out the haven of precious metals.
Gold and silver have typically provided investors with an effective hedge against uncertainty. Today, knowledgeable investors also recognize that platinum can play an important role in their investment strategies, as a component of a diversified portfolio. Like the other precious metals, the price of platinum is driven by basic supply and demand forces. The following factors are expected to either increase demand or reduce supply (or both), therefore enhancing the value of platinum:
- New and more stringent emissions control regulations worldwide have spotlighted platinum's role in fighting pollution. More vehicles are using platinum-based catalytic converters, and the recent revival of world economies (1994-95) has helped vehicle sales. As the fight to reduce pollution grows, platinum demand should continue to rise.
- Platinum jewelry appeal continues to be strong, especially in Japan. Despite Japan's recent recession, platinum jewelry sales are constantly rising as younger consumers enter the market. Consumer demand for platinum jewelry is growing rapidly outside Japan as well, particularly in the bridal market.
- Although platinum demand continues to grow, supplies are not expected to increase in the near future. Russian platinum sales have begun to decline in recent years due to a variety of internal economic factors, preventing their normal levels of platinum production. Also, South African mines have recently completed long-term expansion plans and will likely be reluctant to increase platinum production in the near future.
Platinum coins offer an opportunity to all investors. Between 5-15% of all platinum mined goes into legal tender coins and small bars of pure metal. Struck in a variety of sizes, from one gram to one kilo, they are recognized and traded around the world as an integral part of the highly liquid platinum investment market. Physical ownership of bullion coins, proof coins and small platinum bars gives you the opportunity to participate in a vigorous marketplace that reflects the investment community's increasing interest in platinum. The many faces of platinum, in industry, jewelry, and coins, should make this modern precious metal an appealing investment for years to come.
History of Platinum
The recorded history of platinum began in the 16th century, when it was discovered in Colombia by the Spanish Conquistadors. Its true significance, however, was not recognized until 1803 when William Wollaston, a British scientist, was able to extract platinum from its close molecular bond with other metals, such as palladium and rhodium. In 1828, Russia became the first major country to mint platinum coins. In 1907, Cartier made the first wristwatch fashioned from platinum, and by the Art Deco period, platinum had become the most fashionable precious metal used in jewelry in Europe and in the U ' S. Platinum's remarkable qualities make it essential for a myriad of uses. Its molecular weight (almost twice that of lead), unusually high melting point (3,215'F) and extreme durability are useful in high temperature, high pressure production. The metal also has strong catalytic properties, which allow it to quicken chemical processes, and its inert nature makes it useful in products requiring contact with human bodies. Platinum is also highly sensitive and conductive, and therefore ideal for applications in high-tech sensors and radar. Today, platinum is considered one of the most vital and versatile elements available to mankind. Whether as elegant jewelry, medicine, a chemical catalyst, or an investment, platinum makes diverse and unparalleled contributions to our everyday lives.
Although platinum is well known for its traditional role in the production of coins and fine jewelry, its artistic contributions are only part of the story. The number and scope of platinum's industrial uses have skyrocketed during this century, to include neurosurgical and dental apparatus, drugs for cancer treatment, computer and automotive equipment. In fact, one of every five goods manufactured either contains or is produced using platinum. It is considered a strategic metal by the U.S. Government due to its role in the defense, medical and telecommunications industries, Platinum is even stockpiled by the government for possible defense emergencies. One of its most essential uses, however, is in auto catalytic converters. Within autocatalysts, platinum converts harmful emissions into carbon dioxide and water. Nearly 35% of newly mined platinum is utilized in this fashion. Due to its function in the automotive industry, it has been dubbed \"the environmental metal.\"
While new uses for platinum are being discovered almost daily, its supply is extremely restricted. Remarkable difficulties exist in its mining and production, with only about 130 to 140 tons of pure platinum mined per year worldwide; that figure is less than 5% of gold production and less than 1 % of silver production. All of the platinum ever mined would fill a room measuring less than twenty-five cubic feet! Refining the metal poses its own problems; platinum occurs naturally in combination with other metals, necessitating an intricate process that takes about six months. This problem is exacerbated by the limited sources of platinum production. Approximately 90-95% of the world supply is produced by South Africa and Russia. Unlike gold, there are no central bank holdings of platinum. If the main producers were to interrupt mining and production, above-ground platinum reserves would last an estimated one-to-two years for critical uses. By contrast, if gold production was stopped, existing reserves would probably last over 30 years for critical uses.
- Did you know that platinum has a melting point of 3,215 degrees F. but when combined with its five sister metals (Iridium, Osmium, Palladium, Rhodium and Ruthenium) they create a strong alloy that resists melting at temperatures up to 4,000 degrees F?
- Did you know that platinum was used to counterfeit Spanish gold coins in 1865 & 1868? The coins were plated with gold and sold as authentic gold coins. Today, the fake coins are worth more than the genuine item.
- Did you know that you would get sick flying in a jet airliner without a platinum catalyst which eliminates the ill effects of ozone that is present in the higher levels of our atmosphere?
- Did you know that platinum is used in the refining of oil to boost the octane rating of gasoline and jet fuel?
- Did you know that a six-inch cube of platinum weighs about as much as an average man?
- Did you know that platinum is one of the densest of all the metals? Platinum is 11 % denser than gold and weighs twice as much as silver and lead.
- Did you know that all of the platinum mined around the world last year is equivalent to just five seconds of annual steel production?
- Did you know that Ernest Hemingway had a platinum knee as a result of injuries suffered in WWI?
- Did you know that the World Cup Soccer Trophy is made of platinum?
- Did you know that platinum is sprayed onto metallic computer data storage disks to retain the programmed data? These disks are used by the world's leading disk-drive makers.
- Did you know that Faberge, the jeweler to the Russian czars, used platinum to adorn his famous eggs?
- Did you know one gram of platinum can be stretched into a wire that is over 2,000 meters (over a mile) long?
- Did you know that platinum is used in automobile spark plugs?
- Did you know that platinum has been found in meteorites that hit the Earth in the dinosaur age?
Western World Platinum Demand for Platinum
Platinum Fact data provided coutesy of Platinum Guild International (USA) Inc.