Gold vs. Platinum: Is Gold or Platinum the Better Investment?

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Contributor, Benzinga
October 16, 2023

Throughout history, investors have flocked to precious metals like gold and platinum during tough economic times and high inflation. These precious metals are tangible, have a fixed amount and can be used in various industries.

Gold is used in mobile phones, batteries and jewelry. Platinum is used in electronics but has a greater variety of uses. It's the bedrock for many resources, such as medical devices and solar panels. 

Investors can accumulate both precious metals but which one is better? This guide provides information about the future of gold vs. platinum, alternative precious metals and how to easily create a precious metals IRA.

Gold vs. Platinum: Utility

Gold and platinum have uses outside of jewelry and currency. Gold is used in electronics, dentistry and other industries since it's a good conductor of electricity.

It doesn't corrode, which makes it a key component of semiconductors, batteries and mobile phones. It might be surprising, but you could own a small amount of gold in your mobile phone.

Platinum is much rarer than gold and it has a greater utility as well. It's frequently found in catalytic converters and solar panels. Platinum is a heavier metal and less resistant to chemical reactions compared to gold. For these reasons, it's frequently used in medical devices like pacemakers and anti-cancer drugs like cisplatin.

Gold vs. Platinum: Which is the Best Hedge Against Inflation?

Platinum and gold have been used as a store of wealth and as a hedge against inflation for years. However, each metal has unique properties and is influenced by numerous factors. Platinum is heavily affected by changes in the automobile market, while changes in the semiconductor industry impact gold prices.

Environmental sustainability laws also contribute to price movements in platinum. With more countries and states pushing for green laws, this trend can make platinum a safer choice than gold.

Gold has been used as currency, returning 25% from 2007-2009. During this same time, platinum had a negative 22% return. Gold is used in recession-resistant industries like dentistry, medicine and electronics. The gold market is more established and liquid, meaning that there is less price volatility and illiquidity.

Since platinum is rarer than other precious, it can be more resistant to inflation compared to other metals. At the same time, this precious metal's rarity makes it harder to trade since it requires more effort to mine it.

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Gold vs. Platinum: Future Outlook

Platinum and gold have a positive future outlook. Platinum had its best quarter since 2008 in Q4 2022. The main reasons behind this move were a projected shortage and estimates that demand would grow by 19%. Platinum has more uses compared to gold, which prompted China to buy a record amount of it in 2022.

Gold is expected to reach record highs this year, especially since central banks throughout the world started loading up on gold in 2022. 

Global economists predict that inflation will remain well above projected targets, which may entice more banks and investors to stockpile gold.

Gold vs. Platinum: Best Alternative Precious Metal Investments

Besides gold and platinum, here are two other precious metals that could be worth investing in.

Silver 

This precious metal can be used in various industries. Steep silver shortages may lead to a price increase over the next five years.

New government regulations, like the Inflation Reduction Act, are likely to increase demand. The Inflation Reduction Act may elevate the importance of solar panels, which would positively impact silver since it's a key component of solar panels.

One simple way to buy silver is via 1-ounce coins like the American Silver Eagle on Red Rock Secured. Each silver eagle coin is made of silver mined in the U.S. and is guaranteed by the U.S. government.

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Copper 

Copper is widely used in electrical wiring and construction. It's found in kitchen appliances, jewelry, railings and doors. Copper's importance in the industrial industry helps the metal generate demand, but it is more volatile than most precious metals.

Top Companies That Sell Gold And Platinum

The following precious metals brokers are Benzinga partners: Birch Gold GroupRed Rock SecuredAdvantage Gold and American Hartford Gold. These partners are BBB accredited, have many positive customer reviews and have helped average investors successfully invest in precious metals.

It's easy to trade gold and platinum by navigating the easy-to-use websites and hotlines. You must confirm your order over the phone to lock in the latest prices. These partners can provide free benefits like transit insurance and IRA rollovers for new clients.

How to Buy Gold and Platinum in a Precious Metals IRA

Another benefit of using the partners mentioned here is that they're precious metals IRA custodians. You can use self-directed IRAs to invest in precious metals on a tax-deferred or tax-free basis.

Per the IRS, a third-party custodian must manage your precious metals that are held in an IRA on your behalf. Your custodian can keep track of your basis and gains and report important paperwork to the IRS. They can keep you updated on any IRA rules and help you avoid penalties like those that occur for not taking RMDs.

Is Gold or Platinum the Better Investment?

Investors can choose from many precious metals, including gold and platinum. Gold has been a traditional safe haven asset and is arguably the most famous precious metal. Platinum is 30 times rarer than gold and has more industrial uses, especially when it comes to the auto industry and healthcare. Platinum has more severe shortages than gold, which can drive up its price. However, gold has had a greater long-term return compared to platinum. Approach gold and platinum investing with a long-term mindset and know your investment goals and risk tolerance.

Frequently Asked Questions

Q

Which metals are 30 times rarer than gold?

A

Platinum and palladium are 30 times rarer than gold.

Q

How much platinum is in a catalytic converter?

A

Each catalytic converter has about 3 to 7 grams of platinum.

Q

Why is platinum not as popular as gold?

A

Platinum is more expensive and rare than gold. However, its scarcity and the difficulty of selling platinum compared to gold make it the less popular precious metal. Platinum is more popular than most precious metals.

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