First described by the Italian scholar Julius Caesar Scaliger in 1557, platinum (XPT) is one of the rarest and most expensive commodities in the world.
In terms of availability, it is more scarce than both gold and silver. Only 130 tonnes of platinum are mined annually, as compared to 1,700 tonnes of gold, and the cost for mining per ounce of platinum is double that of gold.
Platinum’s metallic properties lend it to a variety of commercial and industrial uses. Part of its usefulness comes from its resistance to high temperatures and it does not oxidize from air exposure, making it extremely durable. It’s also an excellent conductor of heat, and does not corrode or react with chemicals.
The Platinum Market
Platinum is a notoriously difficult metal to liquify. In 1557, Julius Caesar Scaliger said “no fire nor any Spanish artifice has yet been able to liquefy”. It’s only in the last decade that people have learned how to properly melt down platinum, and because of those advances, its use in jewellery now accounts for more than 50% of all platinum consumption.
Its other primary function is as a conductor for heat. It’s a vital component of catalytic converters in field engines. More than 80% of all platinum today is mined out of Africa, with the rest divided mostly between Russia, the US and Canada.
What Factors Affect The Price of Platinum?
There are a fair few factors that can influence the price of platinum. Its special properties lend it to a wide variety of industries. With that comes added risk and increased volatility, as its wide range of uses leave it exposed to the changes in demand for all the industries that rely on platinum.
Comparison With Gold
The price of platinum is frequently compared to the price of gold. In regular or stable market conditions, it’s usually expected that the price of platinum will be roughly double the price of gold.
However, in periods of market uncertainty, when the price of gold rises due to its safe-haven status, the price of platinum tends to drop. Often, the two assets can be inversely correlated, with the price of one dropping when the price of the other goes up.
As mentioned previously, platinum’s price is largely dependent on demand in the variety of industries in which it is used.
A change in one of these industries can cause major moves in the price of the precious metal. As an example – platinum is used in combustion engines. If the global trend of green energy continues apace, engine manufacturers may reduce the supply of motored engines, causing the value of platinum to fall.
Scarcity & Demand
Platinum is one of the rarest precious metals on earth. As such, its price is affected by how much is mined versus the demand for platinum in the market. When new mines are opened or closed, this can affect its value.
How can I trade platinum (XPT)?
Platinum is tradable as a single asset with TIOmarkets under the symbol XPTUSD.
What are the best trading conditions for platinum?
As we’ve seen with the recent pandemic, the price and demand for metals can be prone to large swings up or down based on economic turmoil, recovery and economic conditions.
Trade protection: Using risk tools like TIOshield (only available at TIOmarkets) can help to protect your trades against sudden breaking news that may swing the markets one or another.
TIOshield lets you cancel any trade within 1 hour to get all of your margin back.
Execution speeds: Slow order execution speeds can lead to a big difference between the price you see when you click to open a trade, and the actual price your order is opened at. This difference between prices is called “slippage”.
At TIOmarkets, we have some of the fastest execution speeds you can find, resulting in minimal slippage and more orders filled at the price you clicked.
Leverage: Normally, a large amount of starting capital is required to invest seriously in stocks and indices, because only a small amount of stocks is not likely to yield the kind of results most traders are seeking.
High leverage can greatly increase both the risk to your investment and the potential returns.
If you are comfortable with a high level of risk in return for higher potential gains, you may want to seek a leverage ratio that is commensurate to your investment goals.
Register for an account with www.tiomarkets.com or fund your existing account with us to start trading with one of the most trusted and reputable brokers around.
Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never deposit more than you are prepared to lose. Professional client’s losses can exceed their deposit. Please see our risk warning policy and seek independent professional advice if you do not fully understand. This information is not directed or intended for distribution to or use by residents of certain countries/jurisdictions including, but not limited to, USA & OFAC. The Company holds the right to alter the aforementioned list of countries at its own discretion.