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Investing in Platinum

In: Business and Management

Submitted By tgadgil269
Words 477
Pages 2
Platinum as an investment option
With the volatility in the stock markets and recent recession on the minds of the investors, alternative investments have assumed great importance. Investing where money will be safe is the new mantra. Obviously, commodities have become the new investment option knowing the great Indian fascination for the metal; gold and silver have been invested in widely. But today, the prices of gold have also skyrocketed. Silver is not as much preferred as gold. So, an alternative to gold has to be searched. Is platinum a viable alternative? Today, platinum is known as rich man’s gold. Will it appeal to the common man?
Platinum is inherently, costlier than gold. Compared to gold, platinum responds very differently to economic stimuli. Past history reveals that the price of platinum runs in a similar curve as gold, palladium and silver and platinum has always led the bullish sentiment in the markets with palladium. The only downside is the volatility. Historically, platinum has been more volatile than gold or silver. In a strong bull run, platinum/gold spread widens considerably, sometimes reaching figures of about more than $150-$200 occasionally in the last twenty years. It is a fact that in time of extended economic boom, platinum tends to outperform gold and silver but during period of recession, platinum is not such a strong performer. It has been observed that investment in gold increases, maybe due to the psychological attachment of the investors to the yellow metal.
Platinum has a lesser history in the financial markets as compared to gold or silver. Gold and silver have been invested in since ancient times whereas platinum’s history in the financial markets began in the twentieth century.
The supply of platinum in the markets is much lesser than that of gold or silver. It is estimated that the annual supply of platinum is only about...

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