Platinum, the Other White Precious Metal
A Few of the 20,000 2017 American Eagle Platinum Bullion Coins Shipped To Dealers Remain Available For Purchase.
Platinum is an extremely rare precious metals with many unique properties that make it, like its white metal cousin, silver, prized for its beauty and use in industry. Platinum is the most dense precious metal (the ratio of the mass of an object to its volume) Platinum has a density of 21.4, Gold 19.3, Palladium 12.0 and Silver 10.5.
Platinum was discovered in South America around 1735. About ninety years later, platinum was found in the Ural Mountains of Russia. Soon after its discovery, the Russian Emperor Nicolas I had platinum coins minted that circulated from 1828-1845 within Russia. These coins are the only examples of platinum serving as a monetary metal. In 1865, platinum deposits were discovered in South Africa. Today South Africa (approximately 72%) and Russia (13%) supply the bulk of the world’s platinum. Total annual platinum production is about 200-250 tons a year (approximately 6.5-8 million ounces a year).
Platinum’s use in the automotive industry accounts for about 45% of overall demand. Platinum is used in automobiles’ catalytic converters that reduce Nitrogen Oxide emissions. Platinum demand has increased the past two decades as countries like China and India have seen massive growth in their national auto fleets. In 2000, Chinese demand for platinum for catalytic converters was 32,000 ounces. By 2014, demand had grown to 527,000 ounces.
Platinum is less “white” than silver and has a greyish tinge that is popular in many jewelry designs. Platinum jewelry is especially popular in China and Japan. Jewelry demand accounts for about 30% of overall jewelry demand.
The remaining platinum demand comes from the chemical petroleum refining industry (about 10%), electronics (3%) and various other applications including electrodes, anticancer drugs, fuel cells, dental applications, oxygen sensors, spark plugs and turbine engines (about 13%).
Platinum demand for investment purposes is small. While the Canadian Mint, Perth and U.S. Mint produce platinum products they are not produced in large quantities. An Exchange Traded Fund launched in 2013 in South African now holds about 900,000 ounces of platinum.
Due to its scarcity (annual gold mining production is about 10X that of platinum’s), platinum has traded at a premium to the price of gold for most of the past 100 years. During the past three years, however, the price of gold has out-paced platinum by factors of 1.01-1.3 to 1.
The U.S. Mint has not indicated whether it will produce platinum coins in the future. Given the intermittent U.S. Mint production schedule of platinum coins and limited number of platinum coins produced historically, the opportunity to buy current dated U.S. Minted platinum coins in a convenient and cost effective way may not be available in the future.
You can order your one ounce 2017 American Eagle Platinum Bullion coins by clicking here.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.