Thoughts on Platinum?
MKUltra24
Posts: 652 ✭✭✭✭
I’ve been stacking gold & silver for several years as a sort of side show to my coin collection but recently I ordered a couple ounces of platinum because I feel like relative to gold the price of platinum is undervalued.
I remember when I first started stacking platinum actually cost more per troy oz than gold did.
Due to the fact only a tiny fraction of platinum is mined every year relative to gold I feel like it has a lot of upside potential.
What do you guys think of platinum as a PM to stack?
I’m hoping in the future platinum will be worth more than 1/2 of gold’s value and when that happens I can convert my platinum to gold.
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Nope too complicated . just buy gold on dips
Conversion is not free
The most important thing with stacking physical is not to go all james bond villian .
No sharks with laser beams
Confucious also say , be the spider not the fly
It was just a speculative purchase. The vast majority of my stack is gold & silver.
But I guess in a worst case scenario they’re still pretty cool and I can keep them for that reason. No need to sell
No ,never sell just to be rid of them. You have them now just plan out an exit strategy and maybe you can execute it perfectly if you have plenty of lead time.
The market for physical PT and PD is a tiny fraction of the gold market and that translates to a huge penalty in either price(spread) or time . liquidity!
A similarity exists with special gold . Silly crap like first spouse. .999 pure!!! Julia who? no thanks
Special silver like proof ASE's . Oh these are worth 80 bucks , yeah its the same as the other but shinier no thanks i'll get 2 of the other instead plus lunch
When you want out no one wants in or vice versa.
I will say that when the fabled nucleo exchange still existed you could do this. for a while , a brief shining moment you could convert all physical for other type in actual coin or bar form and pay only tranaction and theoretically do a jonny marble exit . Until it went sour and created lot of bag holders and all that metal was seamlessly converted to vapor
Honestly I don’t think I’ll ever need to “exit”.
My plan was to just sell IF I could make a decent profit but if not then I don’t mind holding them until I die in 30-40 years and passing them down.
If you look at historical prices it’s unlikely that platinum will stay at half the price of gold for decade upon decade when it’s already fluctuated so much in the last 10 years.
But I felt like buying some PMs and I just couldn’t justify buying gold or silver at current prices so I decided to try something new.
Well when I say “convert” I just mean sell.
Gold was at about $2,000/oz and Platinum was at about $1,000/oz when I bought my platinum.
If Platinum rises to say $1,500/oz and gold stays the same I can sell my two ounces for $3,000 and buy ~1.5 oz of gold.
Or even if Platinum doesn’t increase and Gold simply drops to like $1500 I can sell my Platinum and buy Gold and make a small profit.
But one important thing to remember is that I know a local dealer who pays spot for BU American Platinum Eagles as long as they look Gem BU.
He pays over spot for Gold Eagles, Buffalos and Silver Eagles though.
But he does pay under spot for Platinum bars. He just told me he has always believed US Mint bullion should have a higher premium than private bars & rounds.
The platinum eagles should be sellable over spot.
Cohodk or someone posted a screen shot from APMEX for platinum this week. Also this week someone posted a 1/10 APE on the US coin BST for 195 and it was gone very quickly . Therein lies the rub. 1 sold at a high premium but if you had a bunch you would need to plan carefully to exit at such a premium because you could actually identify a perfect narrow niche of a market but actually ruin your own exit because demand is spotty enough you could distort a BST pricing system all by yourself.
If I owned a store where I could buy back of spot from the public I would buy platinum and hold for a decade or more.
not those ugly 95% platinum rings of course.
I agree with your approach and believe platinum is a good buy currently under $1,000. There has been a surplus for a few years, but that is expected to change by the end of this year to a longer-term deficit. The costs to mine are much higher now than in the past several years and physical platinum is actually very scarce and is needed for future fuel cells, catalytic convertors to capture carbon, coating missile nose cones and jet fuel nozzles, etc. in addition to some nice coins and jewelry.
I stack a little every year as PM diversification makes some sense to me.
My US Mint Commemorative Medal Set
Platinum has it's allure. Besides being a critical industrial component, I appreciate the density of platinum and chemical inertness when I handle some of my coins.
Consider the benefits of diversification in light of portfolio theory. I've included platinum in my strategy since the 1996 and I can attest to the fact that a 15% platinum component really does provide price stability to a precious metals portfolio over time, through both market peaks and valleys.
Platinum is historically undervalued now compared to gold. So is silver. While it is definitely true that platinum has both liquidity and buy-sell spread disadvantages, it is also true that when the market for platinum warms up, there are very, very serious buyers who line up to buy it (even though that doesn't happen every day).
One approach I've used to maintain an interest is to start collecting a series as bullion (at bullion prices) and then to watch it grow. After awhile, you do get hooked. Several countries issue platinum bullion now, and finding a series to accumulate isn't hard. After awhile, you can sit back and marvel at what you've done.
I agree with Bronco that you need not subject yourself to needless transaction costs in churning your account. It's much better financially to hold longterm if you are inclined to buy platinum in the first place.
I knew it would happen.
Platinum at half the price of gold will PROBABLY catch up over time.
When it goes to par, just flip to AU.
I like the designs on the platinum coins. However, I stick to stacking gold and silver. Liquidity is always there.... The dual purpose of stacking - liquidity and value appreciation. True, platinum has been higher value... and likely will rise again. Good luck. Cheers, RickO
Overpriced gutter metal and not very liquid. Stick with the metal of kings for simplicity and stability. RGDS!
The whole worlds off its rocker, buy Gold™.
If you enjoy stacking platinum like this, you already won:
Perth mint stuff is high quality and generally they dont copy and reuse designs like the us mint
Platinum is the metal of kings
according to King Louis XV of France.
They’ve been reusing the Kangaroo design for years.
Ya i dont mean that. I mean like oh lets resurrect 100 year old walking liberty or mercury dimes because we cant seem to invent anything new anymore.
Even the new quarter obverse people are noticing for 2022 is just a reboot.
You know why the Mint does that right?
It’s because they invite companies like Home Shopping Network (HSN) to their “Mint Symposiums” and ask them what they want.
So of course these companies want something they can pitch to people at overpriced prices and we end up with that kind of stuff.
We need more things like the W quarter that can be found in circulation.
Imagine if every year the Mint made W mintmark coins of all denominations from 1 cent to the half dollar BUT they could NOT be purchased directly from the Mint.
People could have a lot of fun collecting the best condition sets of W denomination coins every year that they can find.
Imagine you have a 2024 W Dime you got in change and you think it might be MS64 and then you find one you think looks MS66. There is a sense of achievement and accomplishment that comes with it.
Miles, can I get one of these from somewhere at a low premium?
I knew it would happen.
Preferably raw without labels ?
Some really interesting perspectives presented here.
I like @jmski52 's "15%" position. I think the knee-jerk reaction is that we should maintain 1/3 silver, 1/3 gold, 1/3 platinum. Maybe we should have a separate discussion on PM portfolio percentages.
But with regards to platinum's liquidity: I've never seen or heard of a local dealer declining to purchase platinum. So maybe my town is strange in that we have buyers and sellers of platinum, all the time. I'm hearing Ulysses Everett McGill from O Brother: Well, ain't this place a geographical oddity!
Regardless: eBay is full of buyers and sellers. Our own monthly BST threads and forums here on CU have buyers and sellers.
The premium or discount may not jibe with what the "market" says. But that's the case with gold and silver right now, too.
--Severian the Lame
Great stack!
My current diversification is:
50% Gold
40% Silver
10% Platinum
But PMs in general represent 20% of my portfolio so most of my money is in growth stocks.
For me PMs is about maintaining the value of my money due to very high inflation.
In my opinion an ounce of silver should always buy a nice dinner.
Got my Pt Tiger from TexasGSE, Jmski.
I see they are out so not sure.
what happened here
https://www.ebay.com/itm/354009068342?nma=true&si=aOGQWPr5aP6ZJYlVAqHrHw%2FHLoQ%3D&orig_cvip=true&nordt=true&rt=nc&_trksid=p2047675.l2557
what happened here
Looks like someone got a nice set of 1991 snowy owls at a premium of 17%.
For comparison, Apmex's best price looks to be around a 14% premium. Essentially, they got it at the prevailing bullion rate.
I knew it would happen.
Ebay prices suck now so those were a decent buy.
Between the lack of ebay bucks and the sales tax im pretty much done
My Platinum Eagles came today! ^_^
If a major use of platinum is catalytic converters and a change over to electric vehicles is taking shape will the demand for the metal be decreasing over time or is there some other major industrial use that will continue to drive demand?
If fuel cell EVs become popular platinum is a winner. The switch to Battery EVs is going much slower than many would have thought. Right now, and for at least another decade or two, hybrid electric vehicles will gain in popularity. They require catalytic converters. BASF and others are redesigning catalyst loadings to use more platinum and less palladium (in deficit) based on mining supplies. Jewelry and some other manufacturing and healthcare uses will consume some platinum going forward. IMO, one area that is overlooked for platinum is investment. It can be stored in a small space, doesn't tarnish like silver, and is much harder to fake than gold.
Platinum has many uses.
Platinum is used in catalytic converters, laboratory equipment, electrical contacts and electrodes, platinum resistance thermometers, dentistry equipment, and jewelry.
However the thing is that the above ground supply of platinum is very small compared to gold.
Approximately 190 metric tons of platinum are mined worldwide annually, compared to 3,300 metric tons of gold.
That means that if there is a new technology developed that depends on platinum the demand would vastly outstrip the supply and drive prices up significantly.
Also as platinum is mined it becomes harder and harder to find more as it is only mined in 4 places on Earth and they have to keep going deeper and deeper.
Well that’s expensive! If platinum prices don’t go up they won’t pay to mine deeper. Even if they do how deep are they willing to go?
I just feel like because platinum is so rare and the supply is so small that it will go up to at least the same price as gold.
Speaking of its use as an investment I read an article that said in the old days some people preferred platinum to gold and silver because platinum does not melt in fires like gold and silver.
It’s true they make fire proof safes but I can only imagine how frustrating it would be to see a bunch of melted gold and silver that used to be one’s life savings. I imagine some of the PMs could be extracted and collected and reminted but it would take a lot of time and effort.
Speaking of discoveries of new uses for platinum I just found this interesting article.
Having a material that is extremely wear resistant has more uses than you can imagine.
The 1/10th oz are fractional though that’s why.
Just like a 1/10th oz AGE costs way more than the $200 melt value.
Usually fractional brings a big premium. I’ve never seen 10x 1/10th oz of any PM sell for the same price as 1 oz of the same PM.
Much higher premium on the platinum than the gold though. Some is fractional premium but the rest is the liquidity premium.
So many people are so underwater that they pad the ask more . which widens the spread which reduces liquidity ad nauseum.
I cant buy a tenth if im 30% over melt its impossible to visualize an exit strategy that gives me more money than i put in.
The same amount of fiat is much safer in gold.
Now if you can be a store owner and pay less up front that might be different.
Being able to have that advantage buying changes the math
Silver eagles, retail, about 50% premium
Platinum, retail, about 15% premium
Half price of gold. And every small coin shop I've ever talked to says: hard to sell. One that I know of will end up selling platinum coins at spot to a local jeweler because retail it is a slow sale.
There will always be a new generation of stackers that will die on the physical platinum hill.
If all the reasons quoted in the thread make platinum a potential winner then trade paper platinum for all the reasons the physical is so troublesome
If fuel cell EVs become popular platinum is a winner. The switch to Battery EVs is going much slower than many would have thought. Right now, and for at least another decade or two, hybrid electric vehicles will gain in popularity. They require catalytic converters. BASF and others are redesigning catalyst loadings to use more platinum and less palladium (in deficit) based on mining supplies. Jewelry and some other manufacturing and healthcare uses will consume some platinum going forward. IMO, one area that is overlooked for platinum is investment. It can be stored in a small space, doesn't tarnish like silver, and is much harder to fake than gold.
Sounds like a winner, to me.
I knew it would happen.
When I was in the corrosion industry, platinum is used in anodes for power plants, pipelines and underground metallic structures because it is very tough & resistant to electrical erosion. Same as in Bosch spark plugs that use platinum.
I knew it would happen.
visualize an exit strategy that gives me more money than i put in
Yep
I knew it would happen.
gold is insurance some say, platinum isnt gold its another metal people are trying to use like gold but unlike gold its not liquid.
that makes it not insurance
think of it as a stock then and trade it in paper
It may not be liquid like gold, but it’s still a physical asset. Real estate isn’t liquid like gold either.
Paper financial products are derivatives, backed by promises. Promises from an industry not particularly known for having great ethics.
I knew it would happen.
but to be monetary insurance it needs to be liquid or it fails.
Real estate is different, you can live in real estate. You can run a business or rent it to earn income.
Platinum isn't real estate and it isnt gold. Its a thing a valuable metal but so what? Copper is more useful than platinum , steel is more useful.
Its its valuable and its compact.
Cocaine is also compact and valuable . It was worth $100 a gram in the 1980's is it going to bounce back? Nope
Good discussion. If you live in real estate, it is taxed. If you run a business or rent it, it requires more input and management effort, and more taxes resulting from that input. Platinum is only taxed when sold for a profit, and it doesn't require much in the way of management or additional input.
Copper and steel may be more widely used and more available, but each metal has more utility in various applications, so "more utility" is somewhat subjective.
The differences between cocaine and platinum are a bit more significant than just being compact and valuable. The price of everything is going higher, so bouncing back from 1980 prices is moot.
Platinum has been lackluster for many years now, so I'd say that it's due for a reversion to the mean on a comparative basis.
I knew it would happen.
But just trade the paper or a miner. The idea of buying into physical because you lack trust in the custodians of the paper is all well and good but the huge spread and massive premium make it impossible to exit the physical platinum and bank the profit.
Say you pay a 15% premium on an ounce of platinum. That is your best case scenario smaller coins have higher premiums . A 15% rise in spot gets you out even . why is this desirable ? If you could buy gold with the same funds with premiums at maybe 5% liquidity is off the chart you can exit a stack of gold coins in a day.
The more platinum you need to exit the harder it is the slower it is the more limited the potential buyers.
The buyers know you are selling a harder to move item so you get a worse price.
Platinum only makes sense if you have pricing power on the in and the out.
Platinum is a godawful choice to pass to your heirs unless they are sharp they will be taken to the cleaners
If you think its cool and want to collect it fine but time is money liquidity is money stress is money frustration is money knowledge is money
Platinum isnt money its a square peg in a round hole.
There is no benefit to all the extra work that you cant earn with gold.
Paper platinum is the way to work its potential. If the paper game collapses how is that worse than owning physical and being unable to exit because you cant effect an exit at a profit?
If the spread is 15% and price starts dropping then it wont become easier to sell . buyers will lower prices they can see spot going down and wont offet more in that environment they have no reason to. So you become the guy that bought 1000 oz silver bars in1980 still sitting on it decades later because you dont want to book a loss. Even as inflation works its magic on the dollar .
Because platinum is not being used extensively in automotive, I see that the only way is up. Most of what you say has some merit, but I think you're too negative on platinum's prospects and I don't think there's as much problem with liquidity, pricing or premiums as you say. Pricing and premiums are always changing - to be sure, but pricing and premiums aren't always negative - they can swing to your advantage every time the market reverses course.
The fact that platinum is much rarer than gold puts it on the same level as palladium and rhodium - a supply disruption can pinch the price well beyond the 15% premium, and so can an increase in the demand side of the equation - both of which are very possible in today's world. That said, platinum requires more patience than gold, for sure.
I knew it would happen.
Just for the record... Platinum and gold exist in the earth's crust in about the same quantity. Obviously, more gold is stockpiled, and there is more effort given to digging it out of the ground to serve as a store of value.
**I was under the impression that , in the earths crust...
Silver is 16x more common than gold
Platinum is 10x rarer than gold
Palladium is 30x rarer than gold
and
Rhodium is 100X rarer than gold...
so
I typed into the googles and this came up first**
**I always through Palladium was 30x rarer than gold and platinum was 10x rarer...
not entirely inclined to believe it so i scratched the surface a bit and got this info**
**Okay.
Then I see the PPM (parts per Million) in the earths crust for Platinum
**
**So I click WIKI and find this image of PPM of different metals in crust... pretty cool
**
**The image show gold a little more common than platinum... if anyone can share other data to get a better understanding, I would appreciate it
**
It's all about what the people want...
The most common peg in the stacker world is square .
Well darn I should’ve waited and bought my platinum today.
I feel platinum is a good deal currently, anything under a grand seems a bargain to me, especially with gold at 1900
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