Platinum is one of several precious metals, including silver and gold, that tend to have high relative values, which can make them attractive to investors. Investing in platinum, likewise, isn’t all that different from investing in other precious metals, and investors can generally add platinum to their portfolios by purchasing bullion (or, the metal itself), purchasing stocks that are involved in the mining or production of platinum, or through funds that may offer exposure to the precious metals market.
Investors may turn to platinum for a number of reasons, such as the potential to see gains or as a possible hedge against inflation. But, as with any alternative investment, there are additional risks and considerations investors should take into account before adding platinum to their portfolios.
Key Points
• Platinum can be added to investment portfolios through physical purchases, mining stocks, or funds offering exposure to precious metals.
• The metal’s value is influenced by supply, demand, and economic factors, including its use in vehicles and electronics.
• Investing in platinum can offer diversification and potential protection against inflation, but involves risks due to price volatility.
• Physical platinum requires secure storage and may be harder to sell compared to stocks or funds.
• Tax implications vary, with physical platinum classified as a collectible, potentially incurring a 28% capital gains tax rate.
Understanding Platinum as an Investment
Platinum is a precious metal, which has a shiny metallic appearance, similar to silver. In fact, the moniker “platinum” comes from the Spanish word “platina,” which translates to “little silver.” It’s been mined and traded for hundreds of years, too, particularly in pre-Columbian South America, and was initially taken to European markets in the mid-1700s. It’s even been found in ancient Egyptian tombs, too. Today, a majority of platinum is mined in South Africa.
It’s commonly used to produce jewelry — again, because of its striking visual appeal — but is also used to produce some auto parts like catalytic converters, in chemical production, and to create computer and electronics components. Additionally, it’s used to produce a host of other products, including wind turbines and even dental fillings. It’s a versatile metal, but it’s largely due to its visual aesthetics that it carries a lot of value.
And that value is mostly tied to the fact that it’s scarce – scarcer even than gold, in fact. Since the mid-1700s, roughly 10,000 cubic tons of platinum have been mined, out of an estimated 70,000 total. So, platinum’s relative scarcity — meaning that it could go up in value in the future (or not, of course!) — is what primarily makes it attractive to investors as an alt investment.
Ways to Invest in Platinum
For investors who are interested in investing in platinum, there are a few primary ways to do it: By purchasing physical platinum, buying shares of funds that may add exposure to platinum to their portfolios, or by purchasing shares of mining companies that may be involved in platinum production. It’s not much different, really, from the types of assets you might consider when determining how to invest in gold or another alternative investment.
In addition, some investors may choose to invest in the precious metal through platinum futures, derivative contracts to buy or sell an asset at a future date for a set price. (Note that SoFi does not offer futures trading at this time.)
Read more: Guide to Alternative Investments
Physical Platinum
Purchasing physical platinum can include buying bullion, examples of which may be bars or coins. Effectively, platinum bullion is solid (or near solid) platinum, valued for its weight, rather than an assigned monetary value (such as a quarter from a mint that’s used for transactions) or its numismatic value (i.e., its value to collectors based on factors such as its rarity and condition).
Bullion coins can be purchased in different sizes, such as one ounce, one-half ounce, and one-quarter ounce . Bars, too, are generally sold by the ounce – one ounce, ten ounces, etc. – and can be purchased through the United States Mint, at coin and bullion dealers’ online shops or stores, and at certain retailers such as Walmart and Costco. Investors may also buy platinum jewelry from jewelers or other retailers.
Platinum ETFs and Mutual Funds
If buying physical platinum isn’t exactly what investors are looking for, they may look at fund options — that can include exchange-traded funds (ETFs) or mutual funds that are focused on or concentrated in the platinum market. There are numerous platinum-focused funds on the market, though each will vary in terms of costs, risks, price-per-share, and individual holdings or allocations. As such, investors should do their due diligence and research the particular funds they’re considering before investing.
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Platinum Mining Stocks
Investing in stocks of companies that are involved in platinum mining or production is another option for investors. Like platinum-focused funds, there are many companies that mine platinum, each with their own individual risks and potential upsides. It’s up to investors to do their homework to weigh the pros and cons and consider how these stocks fit within their overall investment strategy before making a choice.
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Factors Affecting Platinum Prices
Platinum prices are subject to numerous factors, like other precious metals. The largest, however, is supply and demand — as simple as it is, the more that platinum is in demand, the higher its value tends to be. Supply and demand, of course, is influenced by a large set of variables that include how much and often platinum is being used by manufacturers, or even if platinum jewelry experiences a moment of popularity.
In recent years, platinum has seen an increase in demand due to an uptick in electric and hybrid vehicle production, for example. But it’s also been influenced by power outages in South Africa, where most mining takes place, as well as military conflicts and wars in Europe.
Economic factors can also play a role. For instance, some investors crowd into precious metals investing if they feel that a recession is on the horizon or if inflation becomes an issue. That’s because precious metals are often seen as a powerful store of value and a hedge against inflation — though whether or not that’s true is, itself, dependent on other factors.
Advantages of Investing in Platinum
There can be potential advantages of investing in platinum, as noted. For one, adding platinum or other precious metals to your portfolio can add an element of diversification. That is, if your portfolio already contains a good mix of other investment types — which may include stocks, bonds, ETFs, mutual funds, and more — precious metals may be yet another asset class that can help diversify it even further.
Additionally, as mentioned, it’s possible that investing in platinum or other precious metals may help a portfolio retain value if the markets see a dip, or if inflation goes up. Likewise, there’s always the possibility that platinum prices could rise in the future, helping a portfolio’s overall value increase as well — but there are no guarantees.
Read more: What are Alternative Investments?
Risks and Challenges
While there are some advantages to investing in platinum and precious metals, there are risks and other considerations that investors need to take into account to determine if precious metals may be a good investment choice for them.
For example, precious metal values — including platinum — are notoriously volatile. That means that one day platinum prices may look like they’re heading to the moon, and the next, they’re cratering. Investors who don’t have much of an appetite for risk may want to consider whether they can handle wild price swings.
On top of that, if investors are buying physical platinum, they’ll need a safe place to actually store it, where it won’t be affected by environmental conditions, or even tempt thieves. It could also be a bit more of a chore to sell physical platinum, as well, as it’d require at the very least a trip to a trusted coin store or finding a reputable buyer online.
How to Buy Physical Platinum
Buying physical platinum is fairly easy. Investors can find numerous online retailers that sell platinum and other precious metals, and buy through those channels. That includes the United States Mint, which produces and sells platinum coins. Investors can also visit coin or bullion shops in their local markets to see what platinum options are available.
Investing in Platinum Through the Stock Market
Investing in platinum through the stock market is likewise fairly straightforward, as it involves simply selecting the company or fund you want to buy shares in, and executing a trade. But the important part of the trade is doing due diligence before investing.
That means looking at a stock or fund’s financial statements and history of returns, where it’s being operated and by whom, and much more. It’s effectively the same process as investing in any other asset — doing some initial research and analysis of the fundamentals in order to make a choice that aligns with your investment strategy.
Tax Implications of Platinum Investments
Figuring out tax liabilities generated from platinum investments generally boils down to calculating any capital gains on those investments. If you invest in physical platinum, the IRS considers or classifies it as a collectible. So, if you sell it after holding it for more than a year, you may be subject to a 28% capital gains tax rate.
However, if you’ve invested in platinum-focused funds or stocks, there may be other tax implications, and potentially, a different capital gains tax rate. As such, it may be best to touch base with a financial professional to help you figure out exactly what the tax implications of your platinum investment might be.
Comparing Platinum to Other Precious Metals
Platinum is just one of several precious metals that investors often set their sights on, the others being gold, silver, and palladium. They each have their own unique properties, uses, and potential upsides and risks.
Their prices vary over time and, at times in the past, platinum has actually been more expensive than gold, given its rarity. Typically, however, gold is the most expensive per ounce of the four, while investing in silver is typically the cheapest — platinum and palladium lie somewhere between the two.
It may help to review the gold/silver ratio to better understand the pricing differences. Again, depending on an investor’s strategy and how much risk they’re willing to take on, looking at options for each precious metal may be worth the effort.
The Takeaway
Platinum is one of four main precious metals that investors typically focus on. The rare metal has a number of industrial uses, and is valued for its use in jewelry, given its aesthetic and physical qualities.
Platinum investments may be advantageous in that they can diversify a portfolio and act as a hedge against inflation, but precious metal values are typically volatile, and investors would do well to do their research before buying physical assets, or investing in related funds or stocks.
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FAQ
What are the different forms of platinum investments available?
Investors can buy physical platinum — such as bars or coins — or invest in funds that focus on platinum. It’s also possible to invest in companies that operate in or around platinum mining and production.
How does platinum pricing compare to gold and silver?
Gold is typically the most expensive precious metal per ounce, while silver is generally the least expensive. Platinum (and palladium) prices are often between the two, with platinum prices, as of mid-February 2025, around $1,001 per ounce.
What factors influence the platinum market?
Platinum values and the overall market can be influenced by a number of factors, including general supply and demand, industrial need, economic strength, and more.
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