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A to Z Academy / Commodity

Platinum: Price Chart, Overview and How to Invest

November 30, 2021 17:24 PM

Platinum, gold and silver have been coveted and recognized as valuable metals for centuries now. Even today, expect to find at least one of these precious metals in any savvy investor’s portfolio. That said, have you been wondering why the price of platinum has been so volatile or why thousands regard the precious metal as the best for investment purposes? Today’s guide will put all those questions to rest.  

What is Platinum? Platinum Definition and Overview 

Platinum is a commodity, a precious metal, and chemical element that manufacturers around the world use primarily for automobiles, electronics, and jewelry. You’ll find it on the periodic table of elements under the atomic number 78 and symbol Pt. Now, let’s take a deeper dive into Platinum’s history, current status, and some of the different uses worldwide.  

Platinum was nothing but a nuisance for most of its early years. In Colombia, it contaminated the gold being sought by the Spaniards, its obstinate nature making its removal extremely difficult. Others used the metal as a silver counterfeit. Even decades after techniques had been developed to manage platinum, the substance’s uses remained relatively limited, consisting mainly of coinage and jewelry.  

It wasn’t until after World War 2 that rapid evolution in technology resulted in the need for more sophisticated materials like platinum. What made platinum the answer to a host of problems in modern industrial processes was its unique blend of physical, chemical, and electrical properties.  

Today, the auto industry uses platinum for catalytic converters, which helps decrease the toxicity of pollutants and gases created by an internal combustion engine. This precious metal is also used in jewelry, dentistry equipment, electrodes, laboratory equipment, and thermometers.  

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Platinum Price History and Price Today 

Interested in investing in platinum? In that case, you’ll first need to learn everything you can about the platinum price today, as well as its evolution throughout history. That should put you in a better position to make a well-informed decision. 

Platinum Price Historical  

The price history of platinum shows that the metal rose in value from only about $318 in the mid-1980s to $652 in 1986. That’s an approximately 100 percent increase in value in less than three years. But this increase in platinum’s price didn’t last long. Between 1987 and 1991, the precious metal’s market entered a recession that saw platinum lose more than 50 percent of its value before bottoming out at around $330 in July 1991.   

The platinum price chart consolidated in that price range for more than a decade, and after many brief attempts at recovery, finally surpassed the previous $652 high in April 2003. From here, XPTUSD (the platinum symbol in trading) kept rallying higher and higher on growth news, one release after the other, until it hit its all-time high of $2,273 per ounce in March 2008.  

When the subprime-induced stock market crash of 2008 picked up the pace a few weeks later, the price of platinum dropped to a new low of $760 in October 2008, followed by a rebound and pullback to a lower high of $1,739 by February 2010. Between September 2011 and February 2016, platinum’s price fell once more, dropping by 60 percent to about $800.  

Before the precious metal’s price could sufficiently recover, a weak global economic growth coupled with a strengthening U.S. dollar struck between August 2016 and August 2018, causing platinum value to drop by 32 percent to $750. By March 2020 (shortly before the 2020 Covid-19 sell-off), Platinum’s price had recovered significantly and traded at $1,033. 

What Influences the Price of Platinum? 

Historically, Platinum’s price per gram has been subject to both industrial and investment demand. Here is a list of several factors that can influence Platinum’s value. 

  • Investment demand 
  • Changes in Catalytic Converter Technology  
  • Development of electric vehicles 
  • The health of the International automotive industry  
  • The economy of South Africa (80% of platinum mined yearly comes from the nation) 
  • Safety failures at platinum mines 
  • Increased consumer demand in developing nations 
  • Higher global exhaust emission standards  

Platinum Chart  

The platinum chart above shows the precious metal’s price since the 1960s. As you can see, even though the platinum metal price has been gradually rising, it’s also hard to ignore the extreme volatility caused by Platinum’s tendency to spike and crash.  

Actually, here are the ten major crashes that the platinum price per ounce has experienced going back to the late 60s. 

  • The 2020 recession (40% crash) 
  • Between 2016 and 2018, the period saw a 32% crash of Platinum’s value. This was caused by weak global economic growth and a strengthening U.S. dollar. 
  • The period between 2011 and 2016, which saw a 60 percent crash of Platinum’s price.  
  • The 2008 recession (-63%) 
  • The 2001 recession (-32%) 
  • The 1991 recession (-27%) 
  • September 1983 to January 1985, a 38% crash caused by a spike in the U.S. dollar 
  • The 1979 – 1983 recession period (71% crash) 
  • The 1974 recession (-41%)  
  • The 1969 recession (-69%)  

As the platinum chart and analysis above shows, a crash in the precious metal’s price tends to be caused by three different factors: 

  • A weak global economic growth 
  • Strong U.S. dollar periods 
  • During recessions 

Why Invest in Platinum Today? Points to consider 

Platinum offers traders and investors a unique investment opportunity, with solid merits to consider. 

  • A commodity that is currently undervalued  

Platinum’s widespread application in new technologies and the advancement of future technologies isn’t reflected in its current price 

  • It is a rare metal 

Platinum is one of the rarest precious metals on earth, 30 times rarer than gold. Better yet, note that Platinum has historically traded at a healthy premium to gold (even though that’s not the case at the moment.) There have only been four different occasions over the last 40 years where Platinum has been priced lower than gold for an extended period. Platinum’s price markedly recovered on all these occasions.   

  • Platinum’s role in saving the climate 

Platinum is expected to trump gold moving forward as the United States and other leading economies shift their focus to decarbonization and clean energy. Platinum’s role in the future hydrogen economy is essential as it is often used to produce green hydrogen through the electrolysis of water using renewable energy. The increasing investment demand due to the green hydrogen narrative coupled with Platinum’s limited supply could be a powerful catalyst for a bull market in 2022.  

  • Platinum can act as a safe haven 

Platinum’s performance has a low correlation to the performance of conventional assets and performs astoundingly well during periods of economic recovery. 

Where Can I Trade XPTUSD?  

With everything we’ve learned about Platinum in mind, it’s time to set our sights on ZFX, a regulated and broker that’ll allow you to start platinum trading 

Headquartered in London, ZFX allows you to trade the commodity and many others safely, quickly and at competitive fees. Here are several additional reasons to choose this broker. 

  • ZFX puts a special emphasis on safety 
  • The platform allows traders and investors to make platinum forecasts and shape their own analyses with the help of sleek technical indicators and regular market updates. 
  • ZFX accommodates margin trading. This will enable you to start trading platinum CFDs even with a limited amount of funds in your account 
  • ZFX boasts an advanced A.I. technology at its core 

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How to Start Investing in Platinum Now 

If you ultimately settle on ZFX as your broker of choice, here is the step-by-step guide you’ll use to create an account.  

1. Register with ZFX

First, visit the official ZFX site, and at the top of its page, click the “Open an account” button. Next to it, you’ll see another link labeled “Try demo.” If you’re a novice trader and don’t feel confident trading using your real money, feel free to go for this demo option.  

A demo account will award you fake money as well as all the features of a live account. Before committing your real, hard-earned cash, use these two to your advantage and learn everything there is to know about trading platinum CFDs with ZFX.   

After clicking your preferred account type, you’ll be redirected to the page below. 

Trade Walmart - Step 1

In this registration form that opens, type in your personal information, like your given name, family name, mobile number, email address, and the verification code sent to your number. Next, device a strong password, and when you’re done, hit the “Next” button.  

You should find yourself on a page resembling the one above. Here, select your preferred account type from the three options, then tick the box if you agree with ZFX’s terms and conditions. Regardless of the account type you pick, ZFX does allow you to change your option later on whenever you feel like. 

After filling out all the required fields, hit the “Sign up now” button. A page will pop up showing you your MT4 login code as well as password. Record these in a safe and private place.  

MT4 Login to trade platinum

2. Make your first deposit 

Your account is now ready. However, before you can start trading Platinum, you’ll need to fund the account. To do that, find the link labeled “Deposit” from your profile dashboard.

trade Facebook stock with ZFX - Step 3

The link on your account will be on the same spot as the one shown in the image above.  

3. Account verification 

Verifying your identity on ZFX as soon as you open your account is essential. Indeed, as like all other regulated brokers, ZFX won’t allow you to withdraw your profits from unless you’ve completed this step.  

trade Facebook shares with ZFX - Step 4

To verify, find the option labeled “Personal information” on the left side of your profile dashboard. From the dropdown that appears, hit ‘document verification,’ and you’ll be redirected to a page that resembles the one above. After providing all needed documents, ZFX will verify your account and then lift all restrictions.  

4. Trade Platinum 

You can go start trading platinum. When you’re through with all steps listed above, download the MT4 platform using the link at the top of the page (as indicated in the image below) and install it on your phone or desktop.  

ZFX allows its customers to trade the different financial assets available on their platform using the MT4 trading platform. The MetaTrader software can be downloaded as a mobile trading app for iOS devices or a desktop application for Mac and Windows Computers. A web version that can directly run on Edge, Safari, Firefox, and Chrome also exists.  

After picking the MT4 platform that’ll best suit your needs and installing it on the relevant device, log in using the details you save earlier and start trading Platinum. The platinum symbol on MT4 is XPTUSD. 

Tips and Things to Know Before Trading Platinum 

As you start trading Platinum, here are several things you ought to have in mind. 

  • Platinum Market Trading Hours 

The market for Platinum opens at 22:05 GMT Sunday and closes at 20:55 GMT on Friday. There is a daily break in the market between 20:55 and 22:05 GMT. 

  • Ways to Trade XPTUSD

Platinum investors have several ways to invest in the commodity, including shares, ETFs, options, futures, CFDs, and platinum bullions.  

  • Platinum Market Businesses  

Buying shares of platinum exploration and mining companies is another famous, although indirect way, of trading platinum. When platinum’s price per ounce is rising, investors in such stocks can expect a profit as well. Some key players in the realm of platinum exploration and mining include Sibanye Stillwater, Norilsk Nickel, Lonmin, Impala Platinum, and Anglo American Platinum. 

XPTUSD Forecast, Future, and Prediction 

Platinum price ended 2019 at $925 an ounce. Then, when the Covid-19 selloff hit in early 2020, the metal fell even lower to below $600.  However, shortly thereafter, it executed a sharp and swift rebound. The recovery not only resulted in platinum erasing all of its previous losses, but it also saw the commodity trade above the $1000 level for the first time in a long time. 

The rebound momentum continued into the first several weeks of 2021, and platinum even added $300 per ounce in value. Since then, the precious metal has given back some of its gains and has settled at approximately $1,000. 

What can we expect for the price of platinum forecast? To answer that, let's look at a report released by the World Platinum Investment Council (WPIC). According to the report, platinum’s total demand rose by around 26%. Meanwhile, industrial demand rose by 44% during the first quarter of 2021 compared to the same period in 2020. 

The report further pointed out that 2021 is likely to become the third year in a row where platinum has suffered a supply deficit. Precisely, platinum’s total supply is estimated at 7,883 Koz, while the total demand is modeled to be 8,041 Koz.  

Paul Wilson, WPIC’s CEO, had the following to say about the report: “Platinum’s linkage to the green hydrogen agenda is driving a number of investors to consider the metal if they hadn’t in the past.” This report isn’t the only thing maintaining a bullish stance when it comes to the platinum price forecast. The RSI (relative strength index), a measure of how oversold or overbought an asset is, also briefly touched oversold levels at the beginning of September. The indicator should instill even more confidence in platinum’s bullish trade. 

Bottom Line: Is Platinum a Good Investment Now? 

The answer depends on too many factors to give a clear-cut answer. However, longer-term forecasts for the precious metal are encouraging, and the only thing that remains uncertain is how quickly and by how much the platinum price per ounce increases in the future.  

As with all other investment decisions, investing in platinum comes down to a personal decision.  Also, note that forecasts can turn out wrong as the future unfolds. Thus, never invest more money than you can afford to lose. If, with this in mind, you want to trade platinum today, you can do so via ZFX. This broker offers a wide range of trading assets, competitive fees and the much appreciated MT4 platform.

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