Do Lower Platinum Prices Offer Investors An Opportunity For Diversification?
“A stronger dollar is certainly pushing precious metals down amid inflation and rising interest rates. However, that doesn't necessarily mean that precious metals should be shunned because of the recent weakness.
If anything, it offers investors an opportunity to get precious metals exposure at value-oriented prices. One of the precious metals to consider is platinum.
While it maintains its status as precious metal, it also has industrial use, almost making it somewhat of a hybrid precious and industrial metal. Gold might be seen as more of a store of value, but for investors wanting a mix of precious and industrial metals exposure, platinum might be ideal for their portfolios.
"Platinum is another precious metal that is a popular commodity investment. It is mostly used in the auto industry, the jewelry market, along with industrial applications," Gainesville Coins noted. "There is also strong investment demand for platinum. Most of platinum’s demand comes from China followed by Europe."
Like any asset, there will be challenges amid the current market. Platinum isn't immune to the effects of geopolitics and of course, the global economy.
"There are several headwinds for platinum such as the recent COVID-19 lockdowns in China and Russia’s war in Ukraine," Gainesville Coins added. "These are impacting its supply and demand.
Nonetheless, the outlook for the platinum market appears to be positive with automotive, jewelry, and industrial demand expected to rise in 2023 to 2026 according to the World Platinum Investment Council."”