Platinum investment guide

How do I begin investing in platinum?

Platinum investing can take several forms, from small bars and coins to ETF trust funds and derivatives. Each way brings different costs and risks to consider, but platinum's range of bullion investments is more limited than gold or silver, because of both the precious metal's much smaller annual mine output and its much greater use by industry and technology.

This page explains how to invest in physical platinum at the very best prices and store it securely – ready to sell the moment you choose – at the lowest fees with BullionVault. .

Why should I invest in platinum?

Compared with gold or silver, few people ever think about investing in platinum, and fewer still take action. Yet platinum offers a unique investment with a solid case to consider:

• Platinum is vital and irreplaceable in many high-volume industrial applications;
• Platinum is recognised as the world’s premier jewellery metal and commands the highest of all precious-metal premiums as jewellery;
• Ongoing demand faces tight supply, depleted above-ground stocks and rising underlying mining costs;
• Likely demand growth comes from a wide range of technologies, plus continued marketing of platinum jewellery;
• Fuel cells require platinum and will likely play a role in the decarbonising of transportation, material handling, portable and emergency backup power. 

Although rarer than gold (barely one ounce (1oz) of platinum has ever been mined for every 30 ounces of gold), platinum is everywhere in modern life, from catalytic converters in half of all European automobiles to hard disk drives in computer servers, carbon monoxide detectors in your home, thermocouples to check temperatures in industrial furnaces, and hard-wearing diamond clasps on most gold engagement rings.

With platinum's applications being vital to many of the challenges of the 21st century, with a hard limit on supply and (to an extent) a counter-cyclical relationship to the price of gold, platinum is increasingly seen as an important portfolio diversifier as well as an investment in its own right.

In total, annual platinum demand has averaged almost $10 billion over the last 5 years – around one-third the value of silver sold to end-users. Platinum's investing demand, in contrast, equals just 10% of silver investment demand. The metal remains new and little-known as a financial asset with limited investment product availability to meet latent and pent-up demand.

Types of platinum investment

Platinum is traded on the New York Mercantile Exchange and the London Platinum and Palladium Market. To prove security, platinum ingots are assayed and hallmarked, as in the gold and silver markets. As of 2023, gold trades at twice the price per troy ounce of platinum.

Platinum can be bought and sold in the form of bars, coins and ingots. In addition, physically-backed Exchange Trade Funds (ETFs) are available, as are a range of derivatives and futures based on platinum's performance.

How the large-bar platinum market works

Using BullionVault, every gram (1g) of platinum you own is held in the form of a large wholesale bar, meeting the Good Delivery standards of professional trade association the London Platinum and Palladium Market (LPPM).

Each bar – also known as a plate or ingot – must be 99.95% pure platinum or better. Smooth in appearance, with no pits or cavities, the bar must carry a stamp showing its purity, the brand-name or mark of the refiner, a unique serial number, and the year it was made.

Once made, each large platinum bar must stay inside market-approved storage. Fully insured at a fraction of the cost you'd pay to rent a safe-deposit box, this also costs less than properly storing and insuring high-value coins or small bars at home.

Besides saving you the worry, hassle and cost of trying to arrange safe storage elsewhere, these specialist vaults bring two other clear benefits:

• Sell for full value: Because they stay inside approved storage until sold to a final end-user, Good Delivery platinum bars carry a warranty of quality. That means they trade for full market value, without the discounts suffered by coins or small bars that they circulated in private hands, outside the professional circuit. Any problem with a Good Delivery bar is made good by the original refinery. The buyer is never at risk.
• Sell when you choose: Because the metal traded on BullionVault stays safely inside the vault, you don't have to deliver or ship your metal anywhere to sell it. The live online market is open 24 hours a day, every day of the year. So you can sell your platinum any time you choose, trading 1 gram upwards. No waiting for a retailer to open, and no having to shop around to find a buy-back quote for a coin or small bar.

To learn more and get started with investing in and trading platinum with BullionVault, simply register your email address to open an account now.

Investment demand to buy platinum

With industrial, chemical and technological uses dominating the platinum market, that leaves just 7% of annual demand coming from investors wanting to buy platinum over the last 10 years, way below the average figure for gold (40%) or silver (21%).

That hasn't stopped platinum prices reacting to sharp inflows of speculative money. Investment buying saw platinum jump 330% between 1977 and 1980, when the metal averaged $677 per ounce. That beat gold (up 315% in 3 years) but not quite silver (up 350% on its annual average) as the 1970s' inflation crisis peaked.

Platinum prices rose again during what many analysts and pundits called the 'commodities supercycle' of the early 21st Century. The metal rose five-fold from its 1990s' lows to the spring 2008 peak above $2,000 per ounce. It then dropped back as the global financial crisis hit demand and prices for all natural resources.

Over the following 5 years, platinum prices averaged 73% of their peak, almost as stable as gold following its 2011 top and much firmer than silver, which halved on average over the half-decade to 2016.

Compared to gold prices, platinum has been at a discount to the less industrially useful metal on just four occasions during the past 40 years. The current period, its longest ever, is increasingly difficult to square with five consecutive years of demand outstripping supply. Investors who have not previously considered buying platinum may see this as an opportune entry point.

Why mining supply remains tight

Altogether, demand to buy platinum jumped 5-fold between 1960 and 1990, led by surging industrial and then autocat use. Mining output rose to meet it, helped by more efficient mining techniques and also by prices rising over 500% in US Dollar terms on an annual average basis.

Mine output continued to rise as demand growth steadied at the turn of the century, but it has struggled over the last decade. Peaking in 2006, annual output was 25% lower in 2014, when cost-cutting by platinum producers coincided with strike action by mine-workers in South Africa, blocking three-quarters of the world's new mining supply.

Like gold, platinum accounts for just 5 parts per billion of the earth's crust, but it tends to be more concentrated. That makes mining deposits harder to find. On current estimates, geological reserves of platinum equal just 1/8th of the world's unmined gold. Some 80% of that metal sits inside the Bushveld Complex in South Africa, now one of the most costly countries for gold mining. The world produces more crude steel every 4 seconds than it mines platinum each year.

Low-cost platinum investing with BullionVault

It's a common misconception that vaulted bullion, held in large bars and ready to trade in the wholesale market, is only suitable for the very wealthy. Yes, each platinum bar accepted by specialist vaults within the professional circuit must weigh between 1-6 kilograms (32-193 ounces). You also need more than one bar, because these facilities cater to wholesale traders and large investment accounts holding several million dollars of metal, not private individuals with smaller holdings.

But you can now access the same wholesale market – enjoying the same guarantee of quality with the same low storage fees and the same tight trading spread – from as little as 1 gram at a time by using BullionVault.

Already the world's largest online marketplace for physical gold and silver, BullionVault makes investing in platinum bullion cheaper, safer and easier than anywhere else.

Pricing: Nobody gets you more platinum for your money, nor a better price when you sell, because we plug you into the wholesale market. Here miners, refiners, bullion banks, industrial users and manufacturers trade the large Good Delivery bars from which all other platinum products are made. Going straight to the top of the bullion supply chain means you avoid the fabrication, handling, shipping and retailing costs of coins or small investment bars. This typically saves about 10% of your money.

No VAT: Anyone investing in platinum in Europe saves money again, because on BullionVault your purchases do not incur Value Added Tax (VAT). This is charged at 15-27% across the European Union. But the tax authorities recognize BullionVault as part of the professional market, because we are associate members of trade body the London Platinum & Palladium Market (LPPM). This enables us to deal physical platinum with you free of VAT, provided the metal stays inside the secure vaulting arranged on your behalf. You still own your metal outright. But the VAT only becomes payable if you choose to withdraw your platinum out of the vault.

Buy or sell 24/7: BullionVault is the only place in the world where you can trade investment bullion any time, any day. Buy or sell directly for US Dollars, Euros or British Pounds with no forex fees. You deal in open competition with other users, quoting your own prices if you wish to reduce the trading spread still further between live buy and sell prices. You can also trade at the global benchmark price set daily in London.

Daily audit: BullionVault is the only bullion business that proves your platinum is where it should be, in full, every working day. This daily audit explicitly reconciles your platinum to formal third-party Bar Lists from the specialist vault caring for it, alongside any gold or silver you may invest in. Independent assayers then visit the vaults and confirm the full allocation and quality of each bar once a year, coinciding with our business's annual financial audit by independent accountants.

Choosing to store your platinum investment inside secure vaults carries a cost of course. But it's much cheaper than trying to keep and insure your metal at home, and it is very much safer. It also means that, using BullionVault, you can then sell your platinum for full value the moment you choose.

To learn more and get started today, simply register your email address to open an account now.

Platinum coins as a method for investment

Only Russia has ever used platinum as money, and only Russia has ever acquired stockpiles of platinum bars for its national reserves. The metal offers far fewer bullion coins to choose from than gold or silver today. The range of platinum bars available to 'retail' investors is also much smaller.

The US Mint has issued platinum American Eagles alongside its gold and silver coins since 1997, but only intermittently. The following year saw the Royal Canadian Mint, the Chinese central bank and Australia's Perth Mint all begin issuing platinum coins, but the RCM stopped in 2002 (restarting in 2009) while the Chinese Panda hasn't been made in platinum since 2005. The Perth Mint stopped minting platinum Koala coins in 2010.

Why the breaks in production? Platinum coins rarely meet a lack of collector demand, and after the Austrian Mint issued a new 1-ounce Philharmonic coin in 2016, new platinum coins are coming in 2017 from the Rand Refinery to mark the 50th anniversary of South Africa's first gold Krugerrand, and also from the Royal Mint in Wales. But because most platinum is consumed each year in industrial applications or jewellery, manufacturers can hit problems trying to find new metal. Demand from private investors for coins and small bars is also hard to rely on.

Platinum coins and bars have yet to become popular investments in Western markets, and have only really gained attention in Japan. Analysts blame high premiums to spot prices, plus heavy discounts when you want to sell, because the market lacks good buy-back offers from retail dealers.

Some investors choose to buy small platinum bars instead. Typically weighing more than the 1 Troy ounce standard for platinum coins, these bars have a lower price per gram and carry lower manufacturing costs too. But again, private individuals face a limited range with poor availability, and costs remain very high compared to other investments.

Platinum coins

Country	Dealer's % premium to spot	VAT % on purchase price	Buy-back % discount to spot	Total % cost to the investor
US	5-9	0	1-2	6-11
UK	10-20	20	2-3	34-47
Germany	7-15	19	0-1	27-38
Switzerland	10-30	19	3	34-57
Singapore	9-29	0	4-5	13-34

Source: BullionVault research, comparing a range of published retail quotes

Platinum bars

Country	Dealer's % premium to spot	VAT % on purchase price	Buy-back % discount to spot	Total % cost to the investor
US	2-4	0	1-2	3-6
UK	8-10	20	2	32-34
Germany	8-14	19	1-3	30-39
Switzerland	8-9	19	2-5	30-37
Singapore	5-6	0	4-6	9-12

Source: BullionVault research, comparing a range of published retail quotes

Because of how much these costs add to coin and small bar prices, barely 5% of the platinum mined each year goes to make retail investment products. The other 95% goes to practical physical uses, transformed by specialist companies into products vital to modern life. Most platinum today, in order of demand, goes to auto-catalysts for cutting diesel emissions, then the jewellery industry, chemicals production, medicines and biomedics, petroleum refining, glass-making, electricals and also to fuel cells – a 'clean energy' replacement for carbon-burning engines.

Problems with physical platinum investing

Because platinum is an uncommon investment choice, demand for bars and coins can be uneven. That makes refineries and mints cautious about holding large stocks, and it can make retailers wary of buying back products they have sold. Investors choosing small platinum bars typically hope to save money against more expensive coins, but they also tend to want brand-new items, still in their packaging. So on re-sale, these secondhand bars most often end up re-melted as 'scrap' and put back into the wholesale supply chain as part of a larger wholesale bar. That process costs money, cutting the price paid to the dealer and so cutting the price which the dealer can quote to you to repurchase a platinum bar.

When considering an investment, you must also look at the cost of selling as well as buying. In physical platinum, expect to get 1-6% or worse below the prevailing spot price when you come to sell coins or bars – if you can find a buy-back price at all. The retail market for platinum coins and small bars, says specialist consultancy Metals Focus, struggles to find new investors because it offers "few buy-back opportunities, large bid-offer spreads [and] high premiums."

All this has made platinum difficult to buy, sell and trade as an investment. Availability is further limited by uneven and sometimes unreliable supplies of newly mined metal. Some 70% of annual output comes from South Africa, where energy and labour issues have hit production several times in the last decade. This uncertainty at the top of the supply chain can increase the volatility of platinum prices and worsen the gap between prices to buy and prices to sell for anyone at the other end buying retail investment products.

Dealing spreads in the US typically run to 5% and more on platinum bars smaller than 1 kilogram (32 ounces), widening to 10% or more in Germany, the UK and Switzerland. There you must also pay VAT sales tax if you buy platinum outside the professional wholesale market and take possession for home storage. That adds another 7.6% of sunk cost in Switzerland – money you cannot reclaim when you sell – rising to a 19% surcharge in Germany and 20% in the UK.

To date this has made it difficult for private individuals to trade investment platinum efficiently or without incurring VAT in Europe, without the use of a platform such as BullionVault.

Platinum investment FAQs