• How much demand is there for platinum?
  • Why would I invest in platinum?
  • How can I invest in platinum?

Why invest in raw materials? They are fairly crisis-proof as a result of their intrinsic value. Of all raw materials, precious metals are the ones most commonly discussed during recent years. Why would you invest in platinum? You’ll find out here.

How much demand is there for platinum?

Platinum is a rare precious metal, with a production of only 130 tons per year. This is why the annual quantity of platinum is only 6% of the total gold production of approximately 1,500 tons. Much rarer and therefore a greater demand for the available supply. In addition, the price difference between platinum and gold fell in 2008 as a result of the financial crisis. It’s therefore now cheaper to invest in platinum than in gold. Approximately 25% of demand comes from the jewellery industry, where it’s often used in the production of diamond jewellery. Approximately 95% of demand for platinum jewellery comes from Japan.

As is the case with diamonds, a large proportion of the production goes to industry. More than 50% of the demand comes from the industrial sector. In 20% of cases it forms part of the production process, approximately 30% is mainly used in anti-pollution applications.

Why would I invest in platinum?

The major demand has resulted in the price of platinum rising steadily. The intrinsic value of the precious metal has made it popular all over the world. Plus the metal’s unique capacities mean other raw materials are not regarded as competitors. The possibilities in practical applications have made platinum and diamonds two of the most versatile raw materials.

When you decide on buying platinum, as is the case when you buy diamonds, it will most likely have come from South Africa, where the mines are responsible for 70% of the total annual quantity. So far the production there has fallen by 4%. Demand has remained the same, resulting in returns rising every time production falls.

How can I invest in platinum?

Where do I start? You can start with opting for platinum accessories. Buying platinum jewellery with diamonds will result in a piece of jewellery with a high intrinsic value. Bars of platinum will raise more when you sell them, but they are also harder to sell. You buy them and subsequently store them in a safe. Platinum coins are easier than bars. You can opt for a smaller investment compared to instantly opting for heavier bars. This will allow you to limit your initial investments more effectively and you will be able to find a buyer more easily when you start looking.

In both forms you should be looking at 99.95% purity for the highest returns. When can you invest in platinum? Where can I buy the perfect diamond as an investment? Ask BAUNAT’s diamond experts for advice about your jewellery and portfolio.

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