Investors looking to diversify their portfolios often turn to precious metals as a hedge against inflation, economic uncertainty, and market volatility. Among these, gold and platinum stand out as two of the most valuable options.
While gold has long been considered a safe-haven asset, platinum presents a unique opportunity due to its industrial use and rarity.In this article, we’ll explore the pros and cons of investing in gold versus platinum to see which asset is the most profitable for growing your wealth. We’ll also cover different investing options for gold and platinum and some key tips for investors to consider.
Let’s start by taking a look at the pros and cons of investing in the more rare mental – platinum. Feel free to use the TOC list to jump straight to any section:
Benefits Of Investing In Platinum
Platinum offers unique investment opportunities, driven by its industrial applications and distinct market characteristics. Here are some of the advantages of investing in platinum:
- Industrial Demand: Platinum is heavily used in industries such as automotive manufacturing, electronics, and medical devices, driving consistent demand
- Scarcity: Platinum is significantly rarer than gold, making it more valuable during supply constraint
- Potential for High Returns: Due to its industrial uses and supply-demand dynamics, platinum has the potential for greater price appreciation
- Less Expensive Than Gold: Platinum is less expensive than gold. Right now platinum trades at around $950 per ounce compared to $2,600 for gold, making it a less costly investment. You can find current platinum and gold prices on HowToInvestGold.com.
- Diversification: Adding platinum to a portfolio can enhance diversification alongside gold and other assets
By incorporating platinum into a portfolio, investors can benefit from its scarcity, growth potential, and ability to further diversify their holdings.
Downsides Of Investing In Platinum
Whith everything good, there are also downsides. Platinum comes with specific challenges that investors should carefully consider such as:
- Volatility: Platinum prices can be highly volatile due to fluctuations in industrial demand and mining output
- Limited Investment Demand: Unlike gold, platinum is not as widely recognized as a safe-haven asset
- Economic Sensitivity: Platinum’s price often depends on the health of industries like automotive manufacturing, making it sensitive to economic downturns
- Lower Liquidity: Platinum is less liquid compared to gold, making it harder to sell quickly in certain markets
Being aware of these risks can help investors determine whether platinum aligns with their investment strategy and risk tolerance.
With the pros and cons of platinum as an investment in mind, let’s compare this to the shiny yellow metal.
Advantages Of Investing In Gold
Investing in gold offers several significant advantages, making it a valuable addition to any well-rounded investment portfolio. Here are some benefits of a gold investment:
- Safe-Haven Asset: Gold has a long history of retaining its value during economic downturns, making it a trusted store of wealth
- Inflation Hedge: Gold prices tend to rise when inflation increases, helping investors protect purchasing power
- Liquidity: Gold is highly liquid, meaning it can easily be bought, sold, or traded anywhere in the world
- Portfolio Diversification: Gold’s low correlation with stocks and bonds makes it an excellent tool for diversification
- Global Demand: Gold is widely recognized and in demand for jewelry, technology, and central bank reserves
By leveraging gold’s unique benefits, investors can enhance their portfolio’s stability, protect against economic uncertainties, and capitalize on its global appeal.
Cons Of Investing In Gold
While gold offers numerous advantages as an investment, it’s important to consider its potential drawbacks before adding it to your portfolio:
- Limited Industrial Use: Unlike platinum and silver, gold’s primary uses are in jewelry and as an investment
- No Yield: Gold does not produce dividends or interest, unlike stocks or bonds
- Price Volatility: While generally stable over the long term, gold prices can fluctuate in the short term
- Storage Costs: Holding physical gold often incurs costs for secure storage. However, some gold IRA companies like GoldenCrest Metals offer free storage for up to 5 years
Understanding these limitations can help investors make more informed decisions and evaluate whether gold aligns with their long-term financial goals.
Now, let’s take a look at what investment options you have for gold and platinum.
Gold And Platinum Investment Options And Strategies
Investors interested in gold and platinum have several avenues to consider, each with its own benefits and risks:
1. Physical Metals
Acquiring physical gold or platinum bars and coins is a traditional investment strategy. These tangible assets can be purchased through precious metals exchanges like:
- BullionVault
- Goldco
- GoldenCrest Metals
- And Birch Gold Group and stored securely in a vault, safety deposit box, or home safe.
However, this approach often involves additional costs for storage and insurance. Some gold companies like GoldenCrest Metals often run promotions of free storage.
2. Exchange-Traded Funds (ETFs)
ETFs provide an alternative to holding physical metals, offering exposure to gold or platinum through funds comprising a range of securities. This diversification reduces the risk of relying on a single stock while simplifying the investment process for those familiar with trading through brokerage accounts. Precious metals mutual funds also fall into this category.
3. Mining Stocks
Investing in shares of companies that mine gold or platinum can yield returns tied to the metals market. However, this strategy carries the risk of over-reliance on a single company’s performance, making diversification within your portfolio essential.
4. Futures Contracts
Futures allow investors to agree on a fixed price for buying or selling gold or platinum at a specified future date. While these contracts offer the potential for high returns, they are inherently speculative and carry the risk of significant losses, making them more suitable for experienced traders.
To recap the investing options for gold and platinum, we recommend investing in physical metals since they don’t depend on the markets or a company’s individual performance.
You can also hold them in your hand and find peace in truly knowing your investment. A great way of doing this and also enjoying tax-deferred growth is through a precious metals IRA. Let’s take a closer look at that next.
Investing In Precious Metals With A Gold IRA / Precious Metals IRA
For investors seeking tax-advantaged growth, a gold IRA (also called a precious metals IRA) is an excellent option to include both platinum, gold, and other precious metals in their retirement portfolios.
A gold IRA is an Individual Retirement Account that allows you to hold approved physical metals like gold, silver, platinum, and palladium while benefiting from tax-deferred growth.
What A Gold IRA Can Help You With
Opening up a gold IRA account has many benefits, and can, for example, help you:
- Hedge against a weaker dollar and increasing inflation
- Limit exposure to economic uncertainty
- Mitigate the effects of geopolitical instability
- Diminish negative fallout from the coronavirus economic crisis
- Diversify your portfolio
- Take real ownership of your financial future
How A Gold IRA Works
Opening a gold or precious metals IRA is a simple process, especially when partnering with experts in this field.
To get a head start, we recommend that you request this FREE Gold & Silver Guide, where you can read about adding precious metals to your retirement savings account. You’ll also be called back by a precious metals specialist within 15 minutes so that you can ask any questions you may have.
Here’s the simple 3-step process to start a gold IRA:
✓ Step 1. Sign Your Agreement
Sign Your Agreement: Review, approve, and sign a standard customer agreement to secure your precious metals purchase and understand the terms of doing business.
Choose a custodian company: If you don’t have a precious metals custodian company, the gold IRA company you choose will assist you in setting up an account with one of their preferred custodians.
✓ Step 2. Fund Your Account
Fund Your Account: Most gold IRA companies offer convenient options for funding your account, such as bank wire transfers or mailing a check to their local offices.
✓ Step 3. Select Your Precious Metals
Select Your Precious Metals: With funds in your account, it’s time to decide which precious metals to add to your portfolio. Choose your preferred metals, and your gold IRA provider will handle the shipping.
Once you have purchased your new precious metals, it’s important to store them according to IRS guidelines for gold or precious metals IRAs. Choose a reliable gold IRA company that offers precious metals specialists to guide you through the setup process and ensure compliance with IRS guidelines.
Lastly, enjoy tax-deferred growth, with no taxes due until withdrawals begin at retirement age.
- How to Buy Physical Gold With Your 401(k) – Complete Guide
- TSP to Gold IRA: How to Convert Your TSP to Gold
Storage Options For Gold & Platinum
Proper storage is essential when owning physical gold or platinum. Many investors choose the security of a safe deposit box at a bank or other financial institution. Alternatively, some prefer to store their precious metals in a secure safe within their homes.
If you decide to store your metals at home, ensure your homeowners insurance provides adequate coverage for their value. Additionally, place them in a highly secure and discreet location to minimize risks.
Additionally, a gold IRA provides you with IRS-approved storage and insurance with a depository such as the Delaware Depository or Brinks.
Before leaving this topic of platinum versus gold investment, let’s take a look at some well-known millionaires who invest in gold and other precious metals.
Millionaires Who Invest In Gold & Other Precious Metals
“If the world does well, gold will be fine. If the world doesn’t do well, gold will also do fine…but a lot of other things could collapse.” — American billionaire businessman Thomas Kaplan
Strategic portfolio diversification is a key strategy for savvy investors, enabling them to safeguard their investments by allocating funds across various markets and reducing the risk of significant losses in any single sector.
Today, many of the world’s wealthiest individuals, such as Ray Dalio, Jim Rogers, Robert Kiyosaki, and John Paulson recognize the benefits of holding physical gold as part of their investment portfolios.
- Ray Dalio (Founder of Bridgewater Associates): Dalio is a strong advocate of gold as a hedge against inflation and geopolitical uncertainty.
“If you don’t own gold, you know neither history nor economics.”
- Jim Rogers (Investor and Co-Founder of Quantum Fund): Rogers has long held gold and silver as a crucial part of his portfolio.
“If the economy gets better, I’ll make money on commodities. If it doesn’t get better, I’ll make money on gold.”
- Robert Kiyosaki (Author of Rich Dad Poor Dad): Kiyosaki often promotes investing in gold and silver to hedge against the devaluation of fiat currencies.
“Gold and silver are God’s money, not fiat currency printed by humans.”
- John Paulson (Hedge Fund Manager): Known for betting against subprime mortgages, Paulson has invested heavily in gold as an inflation hedge.
“Gold is the best hedge against currency debasement.”
- Sam Zell (Founder of Equity Group Investments): When Bloomberg asked Mr Zell why he invested in gold, he commented that gold is a good hedge and…
“Supply is shrinking, and that is going to have a positive impact on the price.”
Do as the millionaires and follow the money! With that said, let’s take a look at what investors should consider when investing in platinum or gold.
Tips For Investors Considering Platinum Or Gold
We recommend always consulting with a financial advisor before making any investment decisions but here are some tips to consider:
Are you looking for long-term wealth preservation or higher potential returns? Gold is ideal for stability, while platinum offers growth potential.
Diversify Your Portfolio:
Avoid putting all your capital into one metal. Combining gold, platinum, and other assets can minimize risk.
Monitor Market Trends:
Stay informed about global economic conditions, industrial demand, and geopolitical events that influence precious metal prices.
Allocate Wisely:
Precious metals should make up 5-10% of your investment portfolio, depending on your risk tolerance.
Consider Physical and Paper Investments:
Physical metals, ETFs, futures, and mining stocks all offer exposure to platinum and gold with varying risks and rewards. We recommend investing in physical precious metals since they don’t depend on how well the company is doing financially and they are assets you can hold in your hand.
Account for Storage and Fees:
If investing in physical metals, ensure you have secure storage options to protect your assets. All legit gold IRA companies work with IRS-approved depositories like the Delaware Depository. These facilities carry insurance in the event your metals would be stolen.
By diversifying your gold IRA with platinum and gold, you can combine the stability of gold with the growth potential of platinum, creating a balanced approach to wealth preservation and appreciation.
But what gold and platinum company should I choose? We’re glad you asked!
Best Gold And Platinum Companies
To help you identify the best option to protect and grow your wealth today, we have reviewed and rated the top 9+ precious metals companies in the industry for regular purchases and gold IRAs.
We have rated each company on a variety of factors including BBB/BCA ratings and complaints, customer reviews, annual fees, precious metals selection, storage options, promotions, and buy-back programs. You can request a free guide/kit from each company by clicking on the “GET FREE KIT!” button to the right.
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| Company | Reviews | Annual Fees | Investment Minimums (IRA) | Preferred Custodian | Free Gold Kit |
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$0 | $25,000 | Equity Trust |  |
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$180 | $10,000 | Equity Trust | |
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$0 | $10,000 | Entrust | |
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$80 | $2,000 | Equity Trust | |
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N/A | $5,000 | Equity Trust | |
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$0 | $50,000 | Equity Trust | |
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$100 | $10,000 | Equity Trust | |
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$180 | $10,000 | Equity Trust | |
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$0 | $10,000 | Equity Trust | |
Choosing any of these industry-leading precious metals companies will ensure a safe investment. Lastly, when it’s time to liquidate your metals, they all offer buy-back programs.
Conclusion Platinum Versus Gold Investment: Which Is Best?
Both gold and platinum offer unique advantages for investors seeking to grow their wealth. While gold excels in stability and liquidity, platinum offers growth opportunities driven by industrial demand and scarcity.
By understanding the pros and cons of each metal, diversifying your portfolio, and considering a gold IRA, investors can take advantage of the tax-deferred growth and long-term benefits of precious metals. Whether you lean toward gold, platinum, or both, precious metals remain a solid addition to any wealth-building strategy.
