How to Buy Platinum

Platinum is a precious metal with automotive and industrial uses that can be made into jewelry and prized by investors. There is also a serious deficit in the amount of platinum available, which led analysts to predict that prices will climb through this year and into the next.

But is platinum investing right for you? Keep reading as we explore the market, its pros and cons, and what you should consider before purchasing.

What to know about platinum investing

Investing in platinum is similar to investing in other precious metals such as gold and silver. You can buy physical platinum in coins, bars, and rounds to keep yourself or hold in an IRA or purchase platinum stocks. These may be funds holding physical platinum or platinum mining companies’ shares.

While platinum is expected to increase in value over the next year—from a current price of around $900 per ounce in March 2024 to $1,200 per ounce by 2025—precious metals are usually best as long-term investments. Their prices can be volatile and fluctuate rapidly in the short term, although they typically maintain or gain value over time.

In some ways, platinum investing is like buying stocks, bonds, or other investments. You should keep all these basics in mind:

• All investments, including platinum, are subject to capital gains tax when sold.
• You shouldn’t keep all your money in any one asset, and industry experts often advise keeping no more than 20% of your portfolio in precious metals.
• No investment is guaranteed, and you should consider all risks before buying any asset.

In the case of platinum, there are some additional factors to consider, especially if you plan to purchase physical metal.

Coins and bars must be stored securely to avoid the risk of theft. If you keep them at home, you will likely need to pay higher insurance premiums for coverage through your homeowner policy. Secure storage options, such as depositories, include insurance coverage, but you’ll need to pay a monthly fee to keep your platinum there.

Then, when you want to convert your investment to cash, it is more involved than taking a withdrawal from the bank. Instead, you need to find a buyer and transfer possession of your platinum. 

Given platinum’s industrial and investment value, it may not be hard to find a buyer, but the sales process involves additional steps that you might not have with other assets.

Where to buy platinum

Once you are ready to buy platinum, you have several options available. These include buying physical platinum, stocks that derive value from platinum and platinum futures or options.

Precious metals investment option	Best for
Buy platinum from a dealer	Taking possession of physical platinum
Open a platinum IRA	Retirement savings and a tax break
Purchase platinum ETFs	Those who don’t want to store physical platinum
Purchase mining stocks	Benefiting from the metal industry as a whole
Invest in platinum futures or options	Advanced investors with a high risk tolerance

Buy platinum from a dealer

If you are interested in having access to physical platinum at your home, then buying from a dealer is the option for you.

How it works

Buying platinum from a dealer is similar to any other retail transaction. There may be local precious metals dealers where you can buy platinum on-site and take it home. Or you could purchase from an online dealer and have your purchase shipped.

What to know

Since platinum prices are constantly changing, dealers rarely list their prices online. However, many do have their inventory available for review. To complete the transaction, be prepared to speak to a representative on the phone.

Open a platinum IRA

Platinum can be used to boost your retirement savings if you hold your precious metals in an IRA. However, you’ll have to follow IRS rules to do so.

How it works

The IRS allows precious metals such as platinum to be held in self-directed IRAs. These retirement plans require a custodian to administer the account and platinum to be stored in an IRS-approved depository. 

Depending on how your IRA is set up, you may get a tax deduction for contributions or tax-free withdrawals in retirement.

What to know

Only platinum that is 99.95% pure is eligible to be held in a precious metals IRA. What’s more, bars, rounds, and coins must be produced by an accredited or certified manufacturer or a national government mint.

Purchase platinum exchange-traded funds (ETFs)

If you like the idea of investing in platinum but are not thrilled about storing it, an ETF could be a solution.

How it works

An ETF is an exchange-traded fund that can be bought and sold like stocks and mutual funds. Several platinum ETFs are available, and these are funds that hold physical platinum and derive their value from the metal.

What to know

There are relatively few North American ETFs available. GraniteShares Platinum Trust, Sprott Physical Platinum and Palladium Trust, and Physical Platinum Shares ETF are all options.

Purchase mining stocks

Mining stocks appeal to those who want to benefit from platinum but aren’t sure about putting their money in the metal itself.

How it works

When you buy mining stocks, you purchase a share of the company. That means the value of your investment isn’t tied directly to the price of platinum but rather to the company’s strength.

What to know

Mining companies may extract different precious metals, but some specialize in platinum. Anglo American Platinum and Impala Platinum Holdings are two publicly traded companies to consider.

Invest in platinum futures or options

Platinum futures and options are best for experienced investors who are comfortable with the risks they entail.

How it works

With a platinum future, an investor is committing to making a purchase in the future at a fixed price. Options may include the right to purchase but not the obligation.

What to know

Futures and options are complex investments and shouldn’t be undertaken by anyone who doesn’t fully understand the risks and costs involved. Work with an investment advisor to learn more about platinum futures and options.

Ask the expert

Catherine Valega

CFP®

I’m not a big fan of investing in the physical commodity due to the general hassle—especially in an IRA when it comes time to take your required minimum distributions. I think it is fine to make small gifts to loved ones as a wedding gift, for example, but beyond that, I don’t advise the physical commodity. ETFs are a great way to get exposure to platinum and other commodities. They are liquid and easy to get into and out of. I would leave the futures and options to institutional investing pros.

How to buy platinum

If you’d like to buy platinum, follow these steps:

1. Research the price of platinum: If you plan to buy physical platinum, check the spot price first. Each dealer will apply a markup to their products, and knowing the spot price will help you gauge how much that markup may be.
2. Decide how much to invest: Next, determine how much you will invest in platinum. Remember, most experts recommend not devoting more than 20% of your portfolio to precious metals.
3. Open an account: Except for physical platinum, all the buying options above will require you to open either a self-directed IRA or a brokerage account. Once the account is open, you can fund it with whatever amount you decide to devote to platinum purchases.
4. Buy platinum or securities: Finally, execute your investment plan. Buy and securely store physical platinum or purchase securities such as stocks, ETFs or futures with your brokerage account.

If you’re interested in commodity exposure, platinum, or other commodities, I would discuss your options with your financial advisor, who will develop solutions by considering your long-term goals, time horizon, and risk tolerance.

Catherine Valega

CFP®

Should I buy platinum?

Platinum isn’t right for everyone, and you should consider your personal preferences and investing goals when deciding whether to purchase this precious metal.

Here are some questions to ask yourself:

• Do I have an inflation hedge in my portfolio already? If you don’t already own gold or silver, buying platinum might be a good way to guard against the effects of inflation on your portfolio.
• Am I looking for short-term gains or a buy-and-hold investment? Because their pricing is so dynamic, precious metals typically aren’t something investors use to make money quickly in the short term. However, if you want an asset that will hold its value in the long term, platinum could be a good choice.
• Do I need my investments to be liquid? Related to the question above is whether you need an investment that can be quickly liquidated for cash. If so, platinum ETFs or mining stocks may be better for you.

Pros and cons of platinum investing 

To sum it all up, here’s a final overview of the pros and cons of platinum investing.

Pros

• Rare metal that is valued for both industrial uses and as an investment.

• Analysts predict platinum prices will rise through 2025.

• Precious metals such as platinum are tangible assets that aren’t tied to any country’s currency and may serve as a hedge against inflation.

Cons

• Owning physical platinum requires secure storage and possibly additional insurance costs.

• Fewer platinum products are available as compared to gold and silver.

• Platinum products can be counterfeited, and investors must be cautious when purchasing.