DEFINITION of 'Platinum'
A chemical element, precious metal and commodity used primarily in jewelry, electronics and automobiles. Platinum futures are traded through commodities contracts on the New York Mercantile Exchange (NYMEX), the Chicago Board of Trade (eCBOT) and the Tokyo Commodity Exchange (TOCOM). It is also possible to invest in platinum by purchasing shares of an exchange-traded fund that invests in platinum or in a number of precious metals.
BREAKING DOWN 'Platinum'
Platinum is much rarer than gold, as the amount of platinum mined each year is only a small fraction of the amount of gold mined each year. Its price is more volatile than gold's, and it has a much lower trading volume on the eCBOT than gold, silver or copper.
Platinum is mined primarily in Russia and secondarily in South Africa. About half of the mined platinum is used in jewelry, where it is desirable because it looks silver in color but does not tarnish, and is stronger and more durable than gold. Platinum is also widely used in the auto industry in catalytic converters and fuel cells. It can sometimes be substituted by the less-expensive metal palladium.