WHAT is 'Platinum'

Platinum is a chemical element, precious metal and commodity that manufacturers use primarily for jewelry, electronics and automobiles. It appears on the periodic table of elements by the symbol Pt. Spanish general of the navy and scientist Antonio de Ulloa introduced platinum to Europe in 1735. Due to its silvery white appearance, Ulloa named the metal plantina, which means little silver.

Platinum futures are traded through commodities contracts on the New York Mercantile Exchange, the Chicago Board of Trade, and the Tokyo Commodity Exchange. 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, like the iPath Bloomberg Platinum Subindex Total Return ETF.


Platinum is mined in both Russia and in South Africa. About half of the mined platinum goes into jewelry, where it is desirable because it looks silver in color but does not tarnish, and is stronger and more durable than gold. In the United States, platinum engagement rings are a popular alternative to white gold engagement rings, which are composed of gold, alloys, and a rhodium plating that gives them a white look. But rhodium fades over time, requiring white gold rings to be replated, whereas platinum rings do not.

The auto industry uses platinum for catalytic converters, which help reduce the toxicity of gases and pollutants in the exhaust that an internal combustion engine creates. Platinum and other platinum grade metals in catalytic converters have led to a secondary market for scrap converters, which scrap businesses will buy in order to extract the metal for resale.

Platinum is one of the most valuable elements in the world, 15 to 20 times rarer than gold based on annual mining production. This means for the past half century, the platinum has traded at a significant premium to gold, though this has not generally been the case since 2008, as a weak global economy put a damper on demand for the precious metal and investor unease about central bank stimulus sent the price of gold higher.

Platinum as an Investment

Since the 2008 financial crisis, platinum has generally performed worse than other metals like gold, silver and palladium. Market observers believe a crash in platinum markets in 2008 scared the investment class away from the metal, leaving the automobile and jewelry industries as platinum’s only source of demand.

  1. e-CBOT

    The CBOT is an electronic trading platform that gives traders ...
  2. Palladium

    Palladium is a shiny, silvery metal used in many types of manufacturing ...
  3. Commodity ETF

    A commodity ETF is an exchange-traded fund that invests in physical ...
  4. Base Metals

    Base metals such as aluminum, copper and zinc are widely used ...
  5. Gold IRA

    A Gold IRA is a retirement investment vehicle used by individuals ...
  6. Silver

    Silver is an element commonly used in jewelry, coins, electronics ...
Related Articles
  1. Investing

    Make Your Precious Metal Choice Less ‘Golden’

    The recent rout in gold prices has affected the rest of the precious metals space as well. However, unlike gold, platinum is benefiting from long term industrial demand as well as constrained ...
  2. Investing

    A Beginner's Guide to Precious Metals

    Since the dawn of time, gold and silver have been recognized as valuable. And even today, precious metals have their place in a savvy investor's portfolio.
  3. Investing

    Stillwater Mining Or North American Palladium?

    Looking for a pure play platinum metals producer? There's really only one option.
  4. Investing

    Top 3 Platinum Stocks for 2018

    Platinum prices have fallen, but 2018 may be a good year for companies that mine it if platinum prices turn around.
  5. Investing

    VGPMX, FKRCX, USAGX: Top 4 Platinum Equity Mutual Funds

    Learn more about precious metals mutual funds and discover the top four platinum equity mutual funds investors should add to their portfolios in 2016.
  6. Managing Wealth

    Investing In Precious Metals

    Buying precious metals can act as a hedge against economic turmoil.
  7. Investing

    Trading gold and silver futures contracts

    Gold and silver futures contracts offer a world of profit-making opportunities for those interested in hedging securities or a speculative plays.
  8. Investing

    How a Bad Zimbabwean Bill Helps Stillwater Mining

    Because Stillwater Mining (NYSE: SWC) is the only U.S. miner of platinum group metals -- and the largest primary producer of those metals outside of South Africa and Russia -- it stands to benefit ...
  9. Investing

    The Most Affordable Precious Metals ETFs

    Precious metals ETFs invest in both physical commodities and futures contracts for precious metals.
  10. Investing

    A Primer On Palladium

    This rare metal is being used in the industry more and more. See how you can get exposure.
  1. What is the history of futures?

    Explore the history of futures trading and the origin of the major commodity futures trading exchanges in England and the ... Read Answer >>
  2. What's the difference between a commodity and a product?

    Understand the difference between commodities and products, and learn how they are connected to each other and to market ... Read Answer >>
  3. What types of futures contracts are typically sold on an exchange?

    Explore the wide variety of available futures contracts traded on exchanges, which range from agricultural commodities to ... Read Answer >>
Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
Trading Center