Platinum
Platinum is another of the precious metals, and is one of the four most commonly used for bullion coins – a group which also includes gold, silver, and palladium. The metal has been known for a long period of time, at least since the Renaissance period in Europe, but as with other metals, it is the coming of the industrial age, with both its superior extraction methods and its demand for rare compounds that are vitally useful in many technological devices, that has caused an explosion in demand for platinum.
The metal is currently more expensive even than gold, which is no mean feat considering how sharply the price of gold has been driven up by the frenzy of speculators. The “royal metal”, as King Louis XV of France dubbed it, has sometimes commanded a price twice as high as gold, and the relative prices of the two metals is believed by some economic theorists to be a general economic indicator; the more platinum is worth relative to gold, the more prosperous and expansionary the economy is.
Platinum is produced in approximately the same amount as palladium, some 200 to 250 tons annually. Unlike palladium, though, its center of production does not lie in Russia (which is perhaps just as well, considering the pollution Russians are capable of) but in South Africa, where some 80% of the substance is obtained. 80% of the world’s platinum comes from South Africa, with the balance coming from Norilsk in Siberia, Sudbury in Canada, and Alaska in the United States.
What Platinum Coins are Generally Available?
Several of the major coin producing mints of the world have made series of platinum bullion coins, which have been eagerly accepted by collectors from a range of different countries. Platinum coins closely resemble silver coins, but tend to be released in fractional coin sizes – that is, less than the standard 1 troy ounce – far more often than silver coins are due to the high spot value of the constituent metal. Releasing fractional platinum coins allows governments to mint platinum that less affluent citizens can also afford.
Many countries across the world currently mint platinum coins, or have done so in the past, while platinum bars and rounds are also produced by some private companies to satisfy the commodity investment demand for this metal. The following are common examples of platinum bullion available today, though there are more types not listed here as well:
• American Platinum Eagles. The United States of America is one of the planet’s leading producers of platinum bullion coins with their Platinum Eagle series. Due to the high cost of platinum, the eagles are issued in a wide range of different sizes, including fractional platinum coins. You can purchase these coins in 1/10 ounce, ¼ ounce, ½ ounce, and 1 troy ounce sizes.
The obverse of American Platinum Eagles bears a beautifully detailed close-up of the crowned face of the Statue of Liberty, in which Liberty is given considerably younger and more pleasant features than the rather sour countenance that appears on the actual statue. The rayed crown and raised right arm of the statue are also visible, along with the legend “Liberty”, the date, and the motto “In God We Trust”.
The reverse is also a splendid piece of numismatic art, with a different design involving an eagle every year. Some examples include 2000, where an eagle is flying triumphantly above a house and barn standing at the edge of a Midwestern field, and 2001, with an eagle soaring over a number of towering saguaro cacti. The legend “United States of America .9995 Platinum [Weight]” appears on the reverse, along with the nominal value.
Platinum Eagles have a nominal face value of $100, and are made of 99.95% pure platinum. They can be used for a precious metals IRA.
• Isle of Man Manx Nobles are platinum coins struck for a brief period during the 1980s by a mint on the Isle of Man, near England. The obverse of the coin shows a crowned effigy of Elizabeth II, but the interesting imagery is, as usual, found on the reverse of the coin. A Scandinavian Viking ship in full sail, with its carved wooden dragon’s head screaming silent defiance over the waves and swooping seagulls, is depicted there. Manx Nobles were minted in 1/20 ounce, 1/10 ounce, ¼ ounce, and ½ ounce fractional sizes as well as the standard 1 troy ounce.
• Australian Platinum Koalas are one of the world’s foremost platinum coin series as well. These coins are struck at the Perth Mint, and are minted in a startling variety of sizes, some so large that they seem more like “plaques” than “coins”. Around 18 tons of these coins have been minted in total, all bearing the effigy of Queen Elizabeth II on the obverse and a koala on the reverse.
The sizes of Platinum Koalas are much more varied than American eagles, partly due to the Perth Mint’s ability to strike larger coins due to more advanced technology than the U.S. Mint possesses. The sizes of coins are 1/20 ounce, 1/10 ounce, ¼ ounce, ½ ounce, 1 troy ounce, 2 troy ounce, 10 troy ounce, and 1 kilogram (31.1 troy ounces). The nominal face value, in Australian dollars, ranges from $5 for 1/20 ounce coins to $3,000 for 1 kilogram coins.
Platinum as Bullion
Platinum would never work well as an actual legal tender, because of several of its characteristics. It closely resembles silver, so it would be indistinguishable from that metal to most people who would be using it, were it to appear in circulation. Carrying an assay would not help, since an assay certificate could be easily faked (especially in an age of laser printers), and it is hard to work. However, none of these problems reduce its value as a bullion coin for collectors.
You should bear in mind, however, that if you are buying precious metals as a hedge against some sort of total collapse of modern society, platinum is a very poor choice. It is an excellent investment for as long as modern technological, fiat currency conditions persist, but in the highly unlikely event of an “Armageddon scenario”, platinum would end up being no more valuable than silver, because it would be indistinguishable to most transacting people.
In short, platinum is only more valuable than silver for so long as assaying is readily available, and for so long as the coinage is used for investment and not as legal tender for everyday transactions.
With this caveat in mind, however, you can feel confident in adding platinum to your precious metals portfolio because the price will likely be kept high indefinitely by a very sparse supply and very intense demand.
What Makes Platinum Valuable?
Platinum is a classic noble metal – resistant to oxidation and corrosion, even at high temperatures, easily malleable yet possessing a high melting point, and chemically inert in its normal form, meaning that it is safe to handle and use. Platinum is extremely scarce on the Earth’s surface, and is often found at sites either of vulcanism or bolide impact. The moon has more platinum than Earth, though it is obviously unfeasible to mine it at the present time.
Platinum is silver-like in appearance, and can be mistaken for the more common metal when only visual identification methods are used. Its stability and resistance to abrasion make it well suited to many industrial applications, and it has a purifying effect on car exhausts, explaining its use in catalytic converters. It is also used in important electrical contacts and medical equipment.
The combination of scarcity, its precious metal characteristics, and its applicability to a number of essential modern technologies are what make platinum as valuable as it is. None of these traits are likely to change in the near future, so platinum is as solid a precious metal investment as any – though its high price makes it accessible only to the more affluent end of precious metal buyers, of course.
