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Platinum is rarer than gold and silver and is one of the rarest metals on Earth. Most of the world's supply of platinum comes from South Africa and Russia. South Africa holds approximately 60-75% of the global supply, and Russia has approximately 10-15%. Some other minor producers include Zimbabwe, Canada, and the US.
Since the two primary sources are South Africa and Russia, geopolitical instability, labour strikes, or economic policies can severely impact supply. For example, in South Africa, there are many labour strikes and power outages that disrupt the mining process. In Russia, the recent sanctions due to the invasion of Ukraine have affected exports and supply chains.
Platinum mining is also more challenging and expensive than that of other precious metals. It's typically found deep underground and in much smaller quantities within the ore deposits. The refining of this metal is also very complex and costly, requiring significant energy input and advanced technology.
These supply limitations of this precious metal make this bullion a more costly and riskier investment than gold and silver.
Even with all the ups and downs, the bullion remains a safe haven, retaining its value. People buy platinum bars not just for the shine—they're thinking long-term. Like gold, platinum is seen as a store of value. Sure, it's more volatile, but that doesn't stop folks from turning to it when inflation kicks in or the economy takes a dip. So when asking if platinum is a good investment, this store-of-value angle deserves a closer look.
And here's the thing: not everyone sees it coming. Since most people are laser-focused on gold, platinum kind of slips under the radar. That means there's less hype, fewer emotional price swings, and sometimes better deals. When markets get shaky, smart investors start looking at assets that the masses aren't chasing yet. That's where platinum steps in quietly—but confidently.
On top of that, some long-term holders love the physical security of platinum bars. They're tangible, they're rare, and they aren't tied to any one currency or bank. In unpredictable times, that independence counts for a lot.
Historical Price Volatility
Platinum has typically traded at a premium to gold due to its scarcity; however, in recent years, platinum has often traded at a discount to gold. Before 2008, platinum was consistently more expensive than gold, sometimes as much as two times. However, after the 2008 financial crisis, the demand for platinum fell due to the drop in the auto industry, which caused its price to fall below gold. Platinum prices went from $2,252 to $800 per ounce. From 2011-2015, prices did rebound to $1,800 per ounce; however, they continued to be cheaper than gold, which broke the historical norm.
From 2015-2020, diesel vehicle demand fell after the Volkswagen emissions scandal, which reduced the need for platinum in catalytic converters. The prices fell to $800-$1,000. During the pandemic of 2020-2021, the price of platinum crashed below $600. However, as economies re-opened, the price corrected itself, bringing it to above $1,200 per ounce.
Today, prices continue to trade lower than gold. Weakening global economic conditions and slowing industrial demand have kept platinum prices volatile, fluctuating between $900 and $1,100 per ounce. Many investors believe platinum is an investment opportunity. If historical trends revert, platinum prices could rise above gold prices. It also helps to look at platinum's price swings through a different lens—timing plays a huge role. When prices dip, it's not just a red flag. For savvy buyers, it's a green light. That momentary drop might look like a loss on the surface, but it can be a golden (well, platinum) chance to buy in low.
Global trends move the prices of industrial metals. The short-term volatility is something that gold doesn't have. For instance, a boost in clean energy, more industrial applications, or a comeback in auto demand could easily push platinum prices back up. Savvy investors can take advantage of this to buy at low prices and sell when the value rises.
There's also this idea of long-term repositioning. Some investors are diversifying away from gold and looking into platinum bars as the next big hedge. They see it as the underdog with serious comeback potential. The keyword here is undervalued, and the smart money often goes where the crowd isn't looking.
And because this precious metal doesn't get as much mainstream love, it can move on quieter signals. That can be tricky, sure, but it also gives investors who do their homework a bit of an edge.
Undervaluation
Platinum has been significantly undervalued in recent years compared to its historical relationship with gold and palladium. Many investors believe platinum is trading below its intrinsic value, making it an opportunity for long-term growth.
As mentioned earlier, this bullion has traded at a higher price than gold and palladium due to its rarity; however, this relationship has reversed in recent years.
|
Year |
Gold Price (USD/oz) |
Platinum Price (USD/oz) |
Palladium Price (USD/oz) |
Platinum-to-Gold Ratio |
Platinum-to-Palladium Ratio |
|
2000 |
$280 |
$600 |
$600 |
2.15 |
1.00 |
|
2008 |
$900 |
$2,200 |
$400 |
2.44 |
5.50 |
|
2015 |
$1,100 |
$1,000 |
$700 |
0.91 |
1.43 |
|
2020 |
$1,800 |
$900 |
$2,400 |
0.50 |
0.38 |
|
2024 |
$2,000 |
$1,000 |
$1,200 |
0.50 |
0.83 |
What does this mean?
-
Pt used to be two times more expensive than gold, but today, it is half the price of gold.
-
Pt once traded at five times the price of palladium, but now palladium is at a higher price than platinum.
-
If the metal reverts to its historical premium over gold and palladium, prices could double or even triple from current levels.
The key reasons for undervaluation are the following:
-
Declining demand for diesel vehicles, which used platinum-based catalytic converters.
-
Automakers shifted to palladium in gasoline engines due to cost savings.
-
The investment demand has lagged compared to gold. Gold is widely seen as a monetary metal and a store of value, whereas platinum is mainly an industrial metal.
-
The economic and geopolitical instability occurring in primary source countries, South Africa and Russia
The price might be down in the short term, but the dip is exactly why some investors are paying attention. When people ask, "Is platinum a good investment?" a lot of the "yes" answers come from this idea: buy low, wait it out, then cash in when the market rebalances. It's the classic value play—just with a shinier twist.
And here's where it gets more interesting: platinum isn't stuck in the past. There's potential for a pivot back into industrial demand, especially if automakers decide to swap it back in place of pricier palladium. Right now, it is far cheaper, so that switch would make financial sense. That could mean more upward pressure on prices.
Beyond cars, there's hydrogen energy. It's not just science fair stuff anymore—governments are pouring real money into hydrogen tech. Platinum plays a key role in that space as a catalyst. If hydrogen fuel tech blows up in the next few years, platinum demand could quietly skyrocket. Suddenly, those bars sitting in vaults don't look so sleepy anymore.
What's more, supply is limited—that's not changing anytime soon. South Africa and Russia, the top suppliers, face recurring challenges like strikes and sanctions. If supply stays tight and demand rises, even novice investors can see an opportunity to buy before prices spike.
Investment Opportunities
As it stands, platinum is viewed more as an industrial metal than an investment metal. As we mentioned above, the current devaluation of platinum presents an investment opportunity. Like most investments, when something is undervalued, its price typically rises over time to reflect its true worth.
The increase in palladium prices, which has been used as a substitute for the metal in some industrial uses, such as the auto industry, poses an opportunity. Automakers may switch back to platinum since it is currently much cheaper than palladium.
It’s use in hydrogen technology also poses a significant opportunity. Platinum is a vital component of hydrogen technology, as it’s a catalyst that helps produce and use hydrogen. Although hydrogen technology is still in its early stages, many governments are investing in it, such as Canada, who recently invested $10 million in 2024 to launch the clean hydrogen hub located in British Columbia.
Still, for platinum to really shine again, industrial demand needs to step up. Right now, a lot of the buzz is around hydrogen tech and the possible return of platinum in car manufacturing. But that's just part of the picture.
Platinum actually has a much wider range of uses than most people realize. It's used in electronics, like hard drives and LCD screens, and even in medical tech, including chemotherapy drugs and pacemakers. It also plays a role in glass manufacturing, fertilizer production, and chemical processing—industries that don't make headlines but quietly keep the world running.
If any of these sectors ramp up—say, more demand for electronics or a boom in medical tech—platinum could see a serious lift. And with its high resistance to corrosion and extreme heat, it's a go-to material for high-performance environments. That kind of versatility gives it staying power.
So while investors are watching the auto and hydrogen sectors, the real opportunity might come from these lesser-known uses. If even a few of them grow steadily, it could tip the scales and push platinum prices higher. That's why some folks are stacking platinum bars now, quietly betting that the metal's full potential hasn't been priced in yet. They're not just thinking about today's demand—they're looking at where the world's headed.
Investment Risks
Like all investments, there are some risks associated with investing in platinum. Its volatility in recent years has made it a riskier investment than other precious metals. Additionally, platinum was heavily used in the automotive industry, specifically for diesel vehicles. However, the rise of electric vehicles can further reduce demand for platinum, thus lowering its prices. The supply chain limitations also make the bullion a risky investment. Although its rarity should increase the price, it can also do the opposite. If a metal is too hard to acquire, industries will look for alternatives, like palladium, which can lower the demand. This will, in turn, affect the price stability.
But here's the thing. Platinum doesn't have to carry the whole portfolio. A lot of investors include it as a way to diversify. Investors already holding gold and silver can add the bullion for exposure to a different set of market forces. Think of it like this: gold tends to stay steady during economic uncertainty, silver often tracks with industrial growth, and platinum sits somewhere in between—part precious metal, part industrial powerhouse.
That mix lets investors catch the upside of the metal if prices take off again, while gold and silver can help cushion the blow if platinum stays flat or dips. It's like building a team where each player brings something different to the table. And for investors buying physical metals, adding a few platinum bars to the stash alongside gold coins or silver rounds keeps things interesting. Diversification means getting exposure to platinum without betting an entire portfolio on it. However, it does come with risks. But for investors who plan ahead and spread their exposure, it can still play a valuable role—especially in a well-rounded metals strategy.
Conclusion
There is much to consider when investing in platinum. Its scarcity, historical prices, undervaluation, opportunities, and risks are crucial factors to consider when deciding to add platinum to your portfolio. For those who have a higher risk threshold, platinum still stands as a strong investment opportunity, especially due to platinum’s vital role in hydrogen technology, which has the potential to be the clean fuel of the future. Platinum bullion does not have as much stock compared to gold and silver; however we do offer a limited supply of the precious metal available for purchase.
If you're keeping an eye on timing, Sprott's spot price charting tools make it easy to track platinum prices in real time. You can explore historical trends, zoom in on specific dates, and compare across metals—all from one dashboard. Whether you're just browsing or planning your next purchase, having the numbers at your fingertips gives you a smarter edge.
FAQs
Why did platinum prices fall after 2015?
Prices dropped due to a decline in diesel vehicle demand following the Volkswagen emissions scandal.
What caused platinum prices to crash in 2020?
The COVID-19 pandemic triggered reduced industrial activity, sending prices below $600.
Is platinum still cheaper than gold?
Yes, platinum currently trades lower than gold due to weaker industrial demand and economic uncertainty.
Can platinum prices rise above gold again?
Historically, platinum has traded above gold, so a reversal is possible if demand strengthens.
Is a price dip a good time to invest?
For many savvy investors, market dips present buying opportunities if long-term fundamentals remain strong.
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Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.
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