The latest buzz in investing may have you asking, how much is a platinum bar worth? As uncertainty hangs over the U.S. and global economies, investors continue to look to precious metals as a haven.
Other metals, like gold and silver, tend to be more popular with investors than platinum due to their history as currency. Still, investors increasingly add platinum to their investments for portfolio diversification and potential higher returns. Here’s a look at what the buzz is all about.
Historical Value of Platinum
The seventh-rarest metal known to humankind, platinum, has had an up-and-down journey to modern-day investment portfolios. Platinum is naturally found with gold, nickel, copper, and cobalt. The Egyptians used it for jewelry thousands of years ago, along with gold, although likely unknowingly.
By the 1500s, platinum was still largely ignored. However, it received the name “Platina” — little silver — from Spanish Explorers who landed in South America, where native peoples used the metal.
Julius Caesar Scaliger, an Italian-French scientist, analyzed platinum in 1557 and discovered that it was not silver. The value, use, and popularity of platinum rose and fell several times for more than 400 years before it became widely used in manufacturing.
Platinum’s variety of applications and rareness make it valuable as an investment. In February 2008, it reached a high of $2,180 per ounce before dropping back to about $780 per ounce in December of that year.
Platinum bars get their value from the scarcity of the metal. There is 16 times less platinum available than gold. Unlike gold, however, platinum has significantly more industrial applications, including the following sectors:
- Automotive
- Jewelry
- Electronics
- Chemistry
- Medicine
With weight options from one gram to 10 ounces, you have many choices to diversify your investments.
Historically, platinum is considered undervalued. The current platinum spot price hovers around $1,000 per ounce, well below the abundant gold. Platinum market prices can be influenced by supply and demand, mine and production costs, global economics and market speculation.
Prices for platinum bars, typically made with .9995 purity, are determined by the weight of platinum and the current market price.
Variations in the Price of Platinum Bars
The price of platinum bars can vary. Consider these factors when looking for your platinum bars.
Condition of the Platinum Bar
The condition of a platinum bar can significantly affect its value and price. Investors often look for bars that are in pristine condition. Imperfections, scratches and smudges can diminish a bar’s value.
Premium Designs
Platinum bars with company and commemorative logos or engravings celebrating special events tend to have higher value and costs. This numismatic value appeals to collectors but also can provide added value for investors.
Weight & Purity
It’s natural to focus on price when you make a purchase. However, with platinum bars, you also have to consider the weight and purity. Most bars should be stamped with the platinum’s weight and purity, also known as fineness. The purity or fineness of platinum is measured in parts per thousand.
The most common purities for platinum bars are .999 and .9995. Investment-grade purity is .9995, although depending on the manufacturer, it may be stamped as 999.5.
Why Invest in Platinum Bars?
Platinum is one of the most heavily used precious metals in manufacturing. About 40% of the metal goes to the automotive industry. Another big chunk goes to jewelry making, and platinum is used in several other manufacturing processes. About 2—11% of platinum is turned into bars and coins to sell to investors.
Because of its heavy industrial purposes, platinum can be overlooked as an investment despite its rarity. However, platinum bars provide many potential reasons to consider investing, leaving you to ask: How much is a platinum bar worth?
While the price of platinum can be volatile and impacted by politics and economics, it has historically held its value over time. Adding platinum bars to your investments can provide a hedge against currency devaluation and diversify your investment portfolio. You also can benefit from potential price appreciation caused by a shortage in the supply of platinum for manufacturing.
How to Store Platinum Bars
Where you store your platinum bars is an important part of your investment process. You want to ensure your platinum is kept out of harm’s way. You don’t want to lose your investment to theft or diminish its value by damaging it.
Wherever you store your one-gram platinum bars, they should be kept in a secure, dry location. You have three options for storing your bars: at your home, in a safety deposit box or at a secure storage facility.
If you keep your bars in your house, place them in a safe. Of course, you also must consider insuring your investment if it’s not covered under your homeowner's insurance policy. A bank safety deposit box can comfort you and assure you that your bars are secure, but you have no recourse if something happens to them.
Your third option is a secure storage facility like Citadel Global Depository Services Inc. For 55 basis points, you can store and insure your platinum bars, and you also have access to the facility.
Difference Between Platinum Bars and Platinum Coins
Platinum bullion refers to bars and coins; both can be an investment choice. However, there are a few advantages to purchasing platinum bars over coins.
Buying small platinum bars can be more effective than coins. The bars usually weigh more than the standard one-ounce coin, allowing you to get more platinum at a lower cost per gram.
Bars also carry a lower premium — the cost above the market price for manufacturing, transportation, storage, other fees, and profit margin — than platinum coins. Additionally, platinum bars are more available than coins. Limited production, industrial demand, and market fluctuations lead to scarcity and the sporadic availability of platinum coins.
Consider Buying Platinum Bars as an Investment
So, how much is a platinum bar worth? You now know the historical value of platinum, the variations in the pricing of platinum bars, the reasons people invest in platinum, and how you should store any bars you buy.
With these answers, you might have enough information to decide whether investing in platinum bars fits your investment goals.
Frequently Asked Questions
Is platinum worth more than gold?
While platinum is vastly more scarce than gold, platinum still takes a back seat to gold in the marketplace as more investors seek the precious metal for its store of value. Platinum’s dual role as an industrial and precious metal makes it more susceptible to market shifts.
Are platinum bars a good investment?
Platinum can provide potential high returns and diversify your investment portfolio. However, the price of platinum bars is subject to volatility, and bars tend to be illiquid.
Why is platinum hard to sell?
Platinum can be hard to sell because the market is small, meaning there aren’t many people buying and selling platinum. Dealers also often don’t offer competitive prices to buy back platinum.