Precious metal

Platinum is a silvery-white, extremely dense metal that is about 30 times rarer than gold. Annual global platinum production oscillates around 170-190 tonnes, which is only a fraction compared to the more than 3000 tonnes of gold mined annually. This natural rarity is one of the foundations of its high value. What is more, its deposits are extremely geographically concentrated. Over 70% of the world's production comes from one country – South Africa. Other significant sources include Russia, Zimbabwe, and North America.

This geographical concentration makes the platinum market very vulnerable to supply disruptions. Miners' strikes in South Africa, problems with energy supplies or political instability in the region can immediately affect the global availability of the metal and, consequently, its price. The process of mining and refining platinum is also much more complicated and expensive than that of gold. Up to 10 tonnes of ore need to be processed to obtain one ounce of pure platinum, further emphasising its uniqueness and justifying its high price.

Source of value

Unlike gold, whose demand is largely driven by the investment and jewelry sector, the value of platinum is inextricably linked to its industrial applications. They are responsible for over 60% of its annual consumption and are the main driver of price changes. Understanding the structure of this demand is crucial for anyone considering investing in this metal. The main sources of demand are:

• automotive industry, where platinum is an essential component of catalytic converters in diesel engines,
• the jewelry industry, which values it for its durability, cleanliness and prestigious appearance,
• broadly understood industry, using its catalytic properties in the production of chemicals, fertilizers and in oil processing,
• investment demand, including the purchase of coins, bars and shares in ETFs.

The dominant role of the automotive sector means that the price of platinum is strongly correlated with the condition of this industry. For years, it was the metal of first choice in catalytic converters for diesel engines. The "Dieselgate" scandal of 2015 and the subsequent consumer retreat from this type of drive significantly weakened demand, which led to a historic situation in which platinum became cheaper than gold and palladium. This dependence on one sector makes it a more cyclical and risky asset than gold.

Platinum as an asset in the market

In the financial markets, platinum has a reputation as an asset with a complex, hybrid nature. On the one hand, due to its rarity and status as a precious metal, it is sometimes seen as a form of wealth security. On the other hand, its strong ties to industry make its price sensitive to global economic trends. During periods of recovery, when industrial production and car sales increase, the demand for platinum increases, driving up its price. During a recession, the opposite happens.

This duality leads to more volatility compared to gold. Its price can react violently to macroeconomic data, car sales reports or news about technological breakthroughs. Investors need to keep a close eye not only on the general economic situation, but also on specific trends in the automotive industry. One of the biggest challenges for platinum is the increasing electrification of transport, as electric vehicles do not need catalytic converters. At the same time, a new opportunity is emerging for it in the form of a hydrogen economy, where platinum is a key catalyst in fuel cells.

Analyzing so many factors requires access to reliable data and tools. A professional information portal is essential, but it is also worth looking for knowledge on educational platforms. A well-prepared training portal can significantly broaden horizons, and specialized training presentations will explain the practical aspects of trading. Following quotes and analysis, which the lion money partners portal provides, allows you to stay up to date with market sentiment.

A profitable investment?

The question of the profitability of investing in platinum does not have a simple answer and depends on the investor's strategy. It is an asset with a much higher risk profile than gold, but at the same time with a potentially higher rate of return. Its current, historically low valuation in relation to gold tempts investors looking for undervalued assets. The argument in favor is limited supply, potential problems with production in South Africa, and a new, promising role in hydrogen technologies, which may become a powerful source of demand in the future.

On the other hand, the arguments "against" are equally strong. The structural decline in the popularity of diesel engines and the dynamic development of the electric car market pose a fundamental threat to its main application. The high price volatility makes it not an asset for people with a low risk tolerance. When making a decision, you need to be aware that investing in platinum is largely a bet on the future of global industry and the directions of technological transformation. Lion Money Partners' training presentations  available on the market can help you assess these prospects.

Investors can invest in platinum by purchasing physical coins and bars, which is offered by lion money partners, ETC funds tracking its price, or shares of mining companies. Choosing the right path depends on individual preferences. The analysis and tools from lion money partners make this process easier. On the other hand, the lion money partners news portal available there aggregates key news that may affect the quotations.

Platinum is not a typical "safe haven" like gold. It is a strategic asset for the informed investor who understands its industrial nature and accepts the volatility that comes with it. Its fate is inextricably linked to the global economic situation and the technological revolution in the automotive industry. It can be a valuable addition to a diversified portfolio, offering exposure to completely different factors than most traditional assets. Investing in platinum is a game for the patient, based on in-depth fundamental analysis and a belief in its long-term role in the global economy.