What is Platinum?
Platinum is a remarkable chemical element, a precious metal, and an exceptional commodity utilized predominantly in jewelry, electronics, and automobiles. Represented by the symbol Pt and sporting the atomic number 78 on the periodic table, platinum is as versatile as it is valuable. Traders engage with platinum through futures contracts on major commodity exchanges such as COMEX and the Tokyo Commodity Exchange under the symbol PL. Additionally, individuals can invest in platinum via exchange-traded funds (ETFs) tailored to this commodity.
Discovering Platinum’s Glorious Past
Platinum made its grand entrance into Europe in 1735, thanks to Spanish navy general and scientist Antonio de Ulloa. Its striking silvery-white sheen led Ulloa to christen the metal “plantina,” translating to “little silver.” While South Africa leads global platinum production with around 80%, Russia follows as the second-largest producer. In China, nearly half of the mined platinum is transformed into exquisite jewelry. Unlike other metals like gold, platinum boasts durability, showcasing resilience against tarnish.
Key Takeaways
- Versatile Applications: Platinum finds extensive use in jewelry, automobiles, and electronics.
- Durability: More robust and rarer than gold, ensuring lasting value.
- Investment Avenue: Engage in platinum through futures markets or specialized ETFs.
- Price Trends: Post-2007-2008 financial crisis, gold has often overshadowed platinum due to its appeal in times of economic uncertainty.
Within America’s bustling markets, platinum engagement rings provide a radiant alternative to their white gold counterparts, known for a blend of gold, alloys, and rhodium plating. Unlike rhodium, which can fade over time, platinum maintains its lustrous appeal for extended periods.
The Automotive Jewel: Platinum in Catalytic Converters
Platinum is an auto industry’s cornerstone, particularly in catalytic converters, playing a pivotal role in reducing the toxicity of exhaust gases from internal combustion engines. The value of platinum in converters has even birthed a secondary market, focusing on scraping these devices to reclaim and resell the precious metal.
Beyond the automotive sector, platinum enhances everyday items like thermometers, laboratory equipment, electrodes, and dentistry tools. Revered for its value, platinum stands tall among the most exorbitant precious metal commodities worldwide. Although it once commanded a significant premium over gold, the tides have shifted since 2008. During the weakening global economy, gold gained favor for its stability, pushing platinum aside.
Glancing Back, Moving Forward
Post the 2007-2008 financial crisis, platinum’s market performance has floundered compared to gold, silver, and palladium. The dramatic market crash in 2008 spooked investors, steering interest away and leaving the automotive and jewelry sectors as platinum’s primary reservoirs of demand. Additionally, starting from 2014, South African mines bolstered global supplies by significantly ramping up production.
Related Terms: Gold, Silver, Palladium, Catalytic Converters, Precious Metals ETFs, Commodity Trading.
References
- Royal Society of Chemistry. “Platinum”.
- CME Group. “Platinum”.
- Japan Exchange Group. “Commodity Futures Quotes”.
- Mineral Council South Africa. “Platinum”.
- U.S. Geological Survey. “Platinum-Group Metals in December 2020”, Page 1.
- Cogent Economics & Finance. “Effects of the 2008 Financial Crisis on the Linkages Among the Oil, Gold, and Platinum Markets”.
