Platinum is one of the world’s rarest metals. The platinum price is currently low compared to February’s record highs. Now may be the time to start investing in platinum.
Before you get started, you want to know how to invest in platinum.
You have several investment options. You can purchase physical platinum. You can buy and sell platinum on paper without actually holding the physical commodity.
Learn more about how to invest in platinum and decide if this exciting commodity is right for your portfolio.
Owning physical platinum is a relatively new phenomenon. Platinum bullion is available as bars or coins.
Before you purchase platinum bullion, be sure you have a secure place to store it. A safe deposit box or bullion safe are some examples.
Many people choose bars for investing in platinum. A large number of companies mint platinum bars, so you can find the exact size and price you prefer.
Platinum bars come in gram and troy ounce sizes. They range from 1 gram to 10 oz or 1 kg. The price changes with the platinum spot price. You’ll pay a small premium over the spot price.
The platinum coin price will be similar to platinum bullion. Coins may have an additional premium because of their rarity or collectibility.
The most popular platinum coin for investors is the American Platinum Eagle. It contains 0.9995 pure platinum and is available in 1 troy oz., 1/10 oz, 1/4 oz, and 1/2 oz sizes. American Eagles are highly liquid, so you’ll be able to sell them easily later.
An exchange-traded fund (ETF) is one alternative to investing in physical platinum. Three platinum ETFs trade in the US.
Platinum ETFs operate on one of two principles. A grantor trust holds physical platinum and administers buying, storing, and selling it on the investors’ behalf. An exchange-traded note invests in platinum futures contracts instead of holding bullion.
Futures trading is a sophisticated investing technique.
Essentially, you buy a contract for a commodity at its current value with delivery of the goods at a future date. You don’t take the physical platinum, though. Instead, you hope to make a profit on the difference between the price you paid and the actual future price.
How to Invest in Platinum
The steps to start investing in platinum depend on your investment plan. Investors of all levels can buy platinum bullion. Investors with little to moderate experience will benefit from professional advice before investing in ETFs or attempting futures trading.
Investing in Platinum Bullion
To invest in platinum bullion, you need to find a reputable bullion dealer. Pawn shops or online marketplaces can put you at risk for fraud.
Some investors choose a membership or subscription program for physical platinum. For a monthly fee, you receive a shipment of curated platinum each month.
Investing in Platinum ETFs or Futures
To invest in an ETF or start futures trading, you need a brokerage account. Many online brokers are available in addition to traditional brokerages.
New investors will benefit from consulting a professional broker. Some online brokers offer educational features for less experienced investors.
Adding Platinum to Your Investment Portfolio
Now that you know how to invest in platinum, you can decide if it’s a good fit for your investment portfolio. Platinum bars or coins give you a physical asset, which some investors find reassuring. Platinum ETFs or futures let you diversify using platinum without worrying about storing precious metals yourself.
You’ve started the research. Talk to a financial professional and add platinum to your portfolio.
For more useful information about investing, check out the rest of our finance articles!