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Platinum Prices

Platinum Spot Price Today

What Drives the Price of Platinum

Although it is one of the rarest precious metals around, there is still intense demand from platinum, and a number of other key factors that impact the price of platinum on the market. Here are a few of the major influences:

Auto Industry Demand – Platinum is an essential component in the production of catalytic converters which are widely used in the auto industry. Platinum is typically used as an effective substitute to palladium in this industry. This has been the case for many years, though with an increased focus on reducing emissions, and spiking palladium prices, comes even more demand. This, combined with any movement in the demand for new cars from the US or China in particular, can be big news for platinum prices.

Political Stability – As mentioned, platinum is an extremely rare precious metal. Not only that, but, the vast majority of the world’s production when it comes to platinum, takes place in South Africa.

They control more than 75% of the platinum mining worldwide. This means that political stability in those mining regions remains key to the market. Any geopolitical tensions or difficulties can lead to supply issues. This can have a dramatic impact on platinum prices. Both China, and the US are key to these political issues as they are with most on the world stage, and also as key users of platinum.

USD Strength – As it does with the majority of precious metals, the US Dollar value again has a big influence on platinum pricing. Almost all platinum purchases are made in Dollars. This means the currency strength particularly as it relates to key supply country currencies like the South African Rand, has a big bearing on the price.

A weaker Dollar can actually disincentives mining of the metal. This means a reduced supply and higher prices. A strong Dollar typically has the opposite result.

Historical Platinum Price Charts

Why Platinum Matters

Palladium may well be the least well-known of the four most common precious metals. Currently though, and at many times throughout recent years, it is easily the most valuable in terms of market price.

With this value comes a certain amount of volatility, though to understand the high price and why palladium is of such importance, you must first understand the production process. Palladium is a by-product of mining other metals, namely platinum or nickel. This means it can be very difficult to produce, and so the supply is usually minimal, and well-controlled.

This is of big significance since palladium is the key precious metal which is vital in the production of catalytic converters for gasoline-based cars. While it is true that high palladium prices can prompt a move to substitute metals such as platinum, when it comes to gasoline based cars at least, palladium delivers a much better quality. This keeps it in focus, regardless of price changes.

Of course there are other industrial uses for palladium too which help it to retain importance. These include use in dentistry, and a level of desirability in the jewelry sector. All factors and uses combined mean that, although it may be the most expensive precious metal, this value is not without solid reason.

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