- Gold and platinum are both valuable, but they are prized for different reasons. Gold is often considered a more stable investment because of its widespread use in jewellery, electronics, and as a financial asset. Platinum, however, is rarer and has more specialised industrial applications, particularly in the automotive industry for catalytic converters. In terms of sheer price per ounce, the value fluctuates depending on market conditions, though gold tends to be more consistently valuable in recent years. Platinum’s value spikes when industrial demand increases, but it can also drop sharply when the demand decreases. Overall, gold’s steady demand gives it the edge in terms of long-term value.
Gold vs platinum: Which offers better value?
When assessing which metal offers better value, the choice between gold and platinum depends on market conditions and individual investment goals. Gold is often seen as a more reliable store of value due to its long history as a currency and reserve asset. Platinum’s value is more tied to its industrial applications, which can make it more susceptible to market fluctuations. For those looking for stability, gold typically offers better long-term value. However, investors with a higher risk tolerance and an interest in capitalising on industrial growth may find platinum more appealing, especially during times of increased demand in sectors like automotive or jewellery.
Platinum vs gold: What should you invest in?
Deciding whether to invest in gold or platinum depends on your investment objectives. Gold is a preferred option for conservative investors looking for a stable, long-term store of value. It is widely recognised, highly liquid, and performs well during times of economic uncertainty. Platinum, on the other hand, is a more speculative investment due to its volatility and dependence on industrial demand. Investors who believe in the growth of industries such as automotive or are willing to tolerate short-term market swings may find platinum an attractive option. For a diversified portfolio, holding a mix of both metals could offer a balance of stability and growth potential.
Platinum vs gold: Understanding market trends
Market trends for gold and platinum differ due to their varying uses and demand drivers. Gold’s price is more influenced by geopolitical events, inflation, and investor demand as a hedge against currency fluctuations. It tends to perform well during economic downturns when investors seek safe-haven assets. Platinum, however, is driven by industrial demand, particularly from the automotive sector for catalytic converters. When the demand for automobiles, especially electric or hybrid vehicles, increases, platinum prices can rise. Conversely, any decline in industrial activity can negatively impact platinum. Investors need to understand these distinct market drivers when considering investments in either metal.
Why platinum is more expensive than gold?
Platinum has historically been more expensive than gold due to its rarity and industrial applications. Platinum is mined in fewer locations and is about 30 times rarer than gold. Its use in various industries, including automotive, chemical, and electronics, increases its demand, leading to higher prices. However, gold’s status as a store of value and its broad use in jewellery and financial markets sometimes cause its price to surpass platinum. Despite this, platinum often remains more expensive due to its specialised industrial uses and lower availability, even though gold holds a larger share of the precious metals market globally.
Price trends of platinum and gold
Gold and platinum are two of the most sought-after precious metals, but their price trends differ due to unique factors influencing each metal.
Gold's price trends are often driven by its role as a safe-haven asset. During periods of economic uncertainty, gold prices tend to rise as investors seek stability, making it a popular choice in turbulent markets. The demand for gold is also influenced by jewellery consumption, central bank purchases, and investment in gold-backed securities. Over the past decade, gold prices have shown steady growth with some fluctuations, peaking during times of financial crises and global instability.
Platinum, on the other hand, has more industrial applications, particularly in the automotive industry for catalytic converters. This dependence makes its price more volatile, as demand shifts with the health of the automotive sector and changes in emission standards. Additionally, platinum is rarer than gold, contributing to higher prices at times. However, it tends to be more affected by market cycles, leading to sharper highs and lows.
In recent years, platinum prices have been more volatile than gold, reflecting its industrial ties, while gold has shown a steadier upward trend, emphasising its role as a store of wealth.
Gold price trends vs platinum price trends
| Aspect | Gold Price Trends | Platinum Price Trends |
| Historical Trends | Steady increase, safe-haven asset during crises | Historically higher but volatile due to industrial demand |
| Demand Drivers | Jewellery, investment, electronics | Automotive, industrial applications |
| Market Fluctuations | Less volatile, driven by geopolitical events | Highly volatile, tied to industrial cycles |
| Current Performance | Outperforming platinum in recent years | More speculative, driven by sector-specific trends |
Differences between platinum and gold
While both platinum and gold are considered precious metals, they differ in several aspects. Platinum is rarer and more expensive to extract, giving it higher industrial value. It’s often used in catalytic converters and high-tech equipment. Gold, on the other hand, has been a symbol of wealth for centuries and is favoured for investment and jewellery. In terms of appearance, platinum has a more silvery, cooler tone, while gold’s rich yellow colour is iconic in jewellery. The durability of platinum also makes it more resistant to wear, while gold, though softer, is valued for its malleability and beauty.
Gold vs platinum: Pros and cons of each metal
| Metal | Pros | Cons |
| Gold | Stable value, recognised globally as a store of wealth | Can be more expensive during times of high demand |
| Highly liquid and widely accepted | Softer and less durable than platinum |
| Popular in jewellery and electronics | |
| Platinum | Rarer and more durable, especially in jewellery | More volatile in price due to industrial dependence |
| Strong industrial demand, particularly in automotive | Less liquid than gold, making it harder to sell quickly |
Should you invest in platinum or gold?
Investing in either platinum or gold depends on your financial goals and risk tolerance. Gold is a more traditional investment, known for its stability and global demand. It is an excellent hedge against inflation and economic downturns, making it ideal for conservative investors. Platinum, while more volatile, offers the potential for higher returns due to its industrial applications. If you’re willing to take on more risk, platinum could yield better gains, especially if the automotive and industrial sectors grow. For a balanced portfolio, it may be wise to invest in both metals, leveraging gold’s stability and platinum’s growth potential.
Can you get a loan against platinum like gold?
In India, loans against gold are a common and popular financial product. You can also get a loan against platinum, although it is less common. Financial institutions primarily offer gold loans due to its widespread use, stable value, and liquid market. Platinum, while valuable, has a more fluctuating price and is less commonly used as collateral for loans. However, some banks and lenders may accept platinum if its value can be reliably assessed. Loan-to-value ratios for platinum loans may also differ, often being lower than gold due to platinum’s price volatility and lower market demand.
How to calculate the loan amount for gold and platinum?
To calculate the loan amount for gold or platinum, the value of the metal is determined based on its purity and current market price. Lenders typically offer a percentage of the metal’s market value as the loan amount. For gold, the purity is measured in carats (22K, 24K, etc.), and for platinum, it’s based on fineness (usually .950 for jewellery). The current price per gram of gold or platinum is then multiplied by the weight of the metal being pledged. Bajaj Finance offers a loan-to-value (LTV) ratio of up to 75% for gold. The LTV for platinum can be lower due to its volatility, in its relevant market.
Loan amount per gram for gold and platinum
- The loan amount per gram for gold and platinum depends on their respective market prices and the lender’s loan-to-value ratio. For gold, the loan amount is generally higher due to its stable demand and established value. For example, if the current market price of gold is ₹5,000 per gram and the lender offers an LTV of 80%, the loan per gram would be ₹4,000. For platinum, if the price is ₹4,500 per gram and the LTV is 70%, the loan per gram would be ₹3,150. The fluctuating price of platinum may result in lower loan amounts compared to gold. Bajaj Finance offers LTV of up to 75% of your gold’s value as loan amount. With a loan amount starting from Rs. 5,000 to Rs. 2 crore, you can also benefit from features like free insurance of gold, multiple repayment options, no prepayment charges, and more, making it a wise financing option.
