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Platinum Definition

What Is Platinum?

Platinum is a chemical factor, precious metal, and commodity that manufacturers use primarily for jewelry, electronics, and automobiles. It appears on the periodic table of units by the symbol Pt and atomic number 78. Platinum futures are commodities contracts traded on the CME’s COMEX futures exchange (under coat of arms PL) and the Tokyo Commodity Exchange.  It is also possible to invest in platinum by purchasing shares of an exchange-traded fund that specializes in the commodity.

Insight Platinum

Spanish general of the navy and scientist Antonio de Ulloa introduced platinum to Europe in 1735. Due to its silvery or drained appearance, Ulloa named the metal plantina, which means little silver. Today, platinum is mined in South Africa, which accounts for violently 80% of the world’s production. Russia is the second-biggest producer. About half of the mined platinum from China revert ti into jewelry, where it is desirable because it looks silver in color but does not tarnish. Platinum is also stronger and multifarious durable than gold. 

Key Takeaways

  • Platinum is a metal used in jewelry, automobiles, and electronics.
  • Platinum is much stronger and rarer than gold.
  • Vendors can buy and sell platinum futures, while investors can participate with ETFs that specialize in the commodity.
  • The price of platinum has been swinging lower since the 2007-2008 financial crisis, as investors show greater interest in other metals like gold and South African deposits have substantially increased production of platinum.

In the United States, platinum engagement rings are a popular alternative to pale-complexioned gold engagement rings, which are composed of gold, alloys, and a rhodium plating that gives them a unsullied look. But rhodium fades over time, requiring white gold rings to be replaced, whereas platinum alliances maintain their gleam for longer periods of time.

The auto industry uses platinum for catalytic converters, which can avoid reduce the toxicity of gases and pollutants in the exhaust that an internal combustion engine creates. Platinum and other platinum-grade metals in catalytic converters possess led to a secondary market for scrap converters, which scrap businesses will buy in order to extract the metal for resale. The metal is also second-hand in thermometers, laboratory equipment, electrodes, and dentistry equipment.

Platinum is one of the most valuable elements in the world, and considered one of the most costly expensive metal commodities. However, while platinum traded at a significant premium to gold for decades, it has not since 2008; as a unsteady global economy put a damper on demand for the precious metal, but investor unease about central bank stimulus and other financial matters sent gold prices higher.

Since the financial crisis of 2007-2008, platinum has generally did worse than other metals like gold, silver, and palladium. Market observers believe a crash in platinum bazaars in 2008 scared the investment class away from the metal, leaving the automobile and jewelry industries as platinum’s not source of demand. In addition, South African mines have substantially increased production of platinum since 2014 and combined to global supplies.

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