When you think of precious metals, it’s likely gold and silver that come to mind. But did you know platinum is also a precious metal?

What is a precious metal, and what makes platinum especially valuable? Read on to find out.

What Is a Precious Metal?

Precious metals are types of metals that occur naturally in the ground in small quantities. It is because they are rare that they are considered precious and valuable. They trade at higher prices than more common metals like copper and aluminum.

As well as gold and silver, examples of precious metals include platinum and palladium. In all, there are six platinum group metals (PGMs) – iridium, osmium, palladium, platinum, rhodium, and ruthenium. The PGMs are chemically similar, so they are mined together.

Where Does Platinum Come From?

Platinum metal is 30 times rarer than gold. While most metals come from the earth’s surface, platinum is largely mined underground, making it harder to produce.

There are only four areas in the world that account for the majority of the production. Most of the world’s platinum comes from mines in South Africa, followed by Russia, Zimbabwe, and North America.

Platinum was first encountered in Colombia. The name comes from the word “platina”, meaning “little silver” in Spanish. It was thought to be an impurity of silver and thrown away. It wasn’t until centuries later that scientists discovered its value.

What Are the Uses of Platinum?

The main use for platinum is in catalytic converters, which reduce harmful emissions from vehicle exhaust pipes. Demand for platinum from the automotive industry is rising, as governments pass stricter laws to cut carbon emissions. That could make platinum even more valuable in the future.

A silver-white color, platinum is malleable, unreactive, and does not rust or tarnish, which makes it ideal for fine jewelry. Platinum jewelry can appear similar to white gold, but professional jewelers can tell the difference.

Chemical refining catalysts, medical appliances, and military equipment also use platinum in small amounts.

Investing in Platinum Metal

As valuable commodities, prices for precious metals tend to rise when other financial assets like stocks and bonds fall in value. That makes them popular with investors. As with gold and silver, investing in platinum can diversify your portfolio and hedge against losses in other assets.

The platinum price tends to be more volatile than gold and silver, so there are opportunities to make larger returns on your investment. But this also means it is a riskier investment.

One of the ways to invest is by buying platinum online. You can buy physical platinum bullion coins and bars. You can also invest in exchange-traded funds (ETFs), mutual funds, or mining company stocks through a trading account.

Learn More About Precious Metal Investing

To decide whether investing in precious metals like platinum is right for your personal circumstances, you should do your own research and consult a financial advisor.

For more articles on investing, browse the Financial Freedom section of our blog.

Jane