Platinum is a precious metal traded in the forex market, used for jewellery and electronic items. The chemical instrument is symbolised as PT and has atomic number 78. It was introduced by a Spanish general named Antonio de Ulloa in the year 1735. The precious metal is white and looks like silver metal. Primarily produced in South Africa and Russia, platinum is solid and durable metal in comparison to gold.
The rings or jewellery of platinum are preferred over white gold and other elements due to its longevity. Being a valuable item and available in scarcity, platinum is costly. Thus, trading Platinum the precious metal is profitable.
Why Trade Platinum?
Trading precious metals is an essential investment being followed for ages now. For example, gold is the most invested precious metal globally. Similarly, platinum is also a kind of investment stored and traded online for-profits—a kind of insurance policy against dollars. Below discussed are the reasons why traders should prefer trading platinum.
Platinum is actively used in the industrial market; the automotive industry uses platinum every day for manufacturing. It is in great demand, and thus investing in the precious metal would be profitable and a good investment. The economy is growing, and so is the demand for such products. Growth is the eventual destination of investments in precious metals as the industries are the developing source of the world.
Hedge over Dollars
Hedging is the risk management strategy that a trader can use to protect oneself and avoid risks. The dollar is the most valued international currency of the world, and thus every other currency is paired with the US dollar for trading. Platinum moves in an inverse direction of the US dollar, and this is a good investment. When the dollar is weak, platinum investments could be beneficial for a trader. Investing in precious metals is a protection against high rising dollars.
Speculation is trading on the securities; the traders invest and earn through the assets. Platinum supply and demand is concentrated due to its use in limited countries. However, in the US and Europe, it is used as a part of ornaments. Thus, making it a good investment for future use.
Imbalances in the market could increase the worth of platinum, such as mining strikes, safety failures in mines, an increase in demand in the market and many other market factors.
Places to trade platinum
Platinum can be traded online and offline. Traders can look for well regulated and authorised brokers in the market. With these brokers, traders can invest and educate about the investment. Trading in CFD commodities is risky due to the volatility of the forex market. Traders must be ready to take high risks to earn profits through CFDs.
Brokers such as ABinvesting, ROinvesting, are the best brokers online to help traders with CFD trading in precious metals. They ease the process with trading tools and platforms to enjoy a smooth trading experience.
Ways to trade platinum
Platinum could be traded in various forms Platinum Bullion, CFDs, Futures, Options, ETFs and Shares. Moreover, the investors can purchase them in physical and online commodity ways as per the need.
Platinum bullion is purchased from the market just like gold and silver. The traders can buy them physically in bars or coins. These are available in the market and online to trade and store for future benefits with different sizes and patterns.
Futures contracts are legal agreements to buy and sell any commodity at a price on a future date. Platinum futures are available for trade in the New York Mercantile Exchange (NYME). Futures provide traders with a high position in the market with leverage and are the contracts that could be used for more leverage in case of price decline.
Platinum options are a kind of derivative instrument traded in the market. These are similar to futures contracts but have an expiry date of the contract. Trading Platinum in futures requires proper knowledge of the market and should be accurate of the price.
ETF means exchange-traded funds and are traded similarly to shares in the market.
The shares of many platinum mining companies are traded in the market. In addition, many public trading companies trade platinum with other precious metals. The share market is huge in itself and thus is beneficial if traded safely.
CFDs is another way of investing in the precious metals market. With this derivative instrument of the forex market, traders can earn and invest. Brokers online offer this facility for traders with a minimum deposit of funds. In addition, CFDs provide great exposure to the market with no purchase of the physical platinum. Instead, traders can own the commodity through a contract online. Thus, making it convenient for traders.
Platinum Commodity Price
The platinum price as per the UK market stands at £719.46. A sound investment for UK traders to invest and secure future profits. The traders investing in gold and silver could buy platinum as a future investment and enjoy trading with brokers.
The value of commodity prices differs between the countries, and traders should check with these for investments and future needs.
A trader should trade in platinum and other commodities because portfolio diversification and the automobile industry is proliferating. These are part of economic developments and would significantly affect the forex market.
Gold has been the main attraction in precious metals, but platinum has made its place over the years. However, it is more rare than gold and is not afforded by all. Only 130 million tons of platinum is extracted from the mines, with more than 1700 tons of gold. The process of mining platinum is complicated and takes more time than any other metal. Around seven months are required to take out platinum from the mines.
With such difficulties and high prices, the value of platinum is more than gold and other metals.
Production of platinum
Pull out of the ore bodies; the metal contains many elements, including platinum, rhodium, osmium and ruthenium. The constituents have the same properties and are separated for further use. Miners take them out from placer deposits that are natural mineral concentrations. The components are made from earthly particles that move due to gravity and other factors of the surroundings.
Platinum is also drawn out of sperrylite and cooperates; they provide platinum to the market in many manufacturing processes.
Platinum Mining Countries
- South Africa
- United States
Platinum CFD Trading
Platinum, as we discussed, could be traded in various forms, and one such of them contracts for difference. In CFDs, the trader does not purchase or sell the instrument but speculates and earns from the market price fluctuations. With the aid of brokers, traders can take advantage of these facilities with real-time trading.
Trading platinum in CFDs provides flexibility to the traders; the price fall and rise does not affect the trade-in CFDs. Traders can close their position in CFDs and sell them to other traders in the market. They can go long and short with CFDs and trade as per their needs.
Other than this, trade-in CFDs gives high leverage. Traders can enjoy a higher position with fewer investments. However, platinum is an expensive commodity, and investing in large amounts is impossible for every trader.
Moreover, trading platinum in CFDs is cost-effective as purchasing such metals is expensive and has lots of security risks. Through CFDs, they are easily available online in a contract and are traded easily online. There’s no need to go to the market and sell them. Thus, saving time and money.
How to trade platinum in CFDs?
Trading platinum via CFDs is profitable as it is a contract between trader and broker where the trader benefits from the opening and closing price of the metal. With high leverage and no storage costs, they turn out to be more cost-effective. In the market price fluctuations, a trader with CFDs can earn from both upward and downward movements. The forecasts are helpful, and if one cannot do that, then the knowledge of the market and trading could be a great benefit in such trading.
With no commission charges and extra fees from brokers is another profit of CFDs. So, trading is straightforward with the same trading process through brokers online and storing them in the accounts held by the traders. As a result, they can enjoy trade with less risk and benefit from the contracts opening and closing price differences.
Traders register with brokers, and if they have an online trading account can directly through brokers invest in platinum CFDs and have a smooth trading experience with proper tools for predictions.
Advantages of Trading Platinum
Platinum is a metal that has several advantages for traders online:
Protection against inflation
Precious metals are the investments for the future, and trading in these help during the crisis time. Inflation affects the prices of plenty of market securities. The cost of living increases, and people cannot invest much during such times. Investments in platinum, gold or silver help traders own them without holding them physically. The metals are purchased and sold online as per the price movements, and a trader can go long and short for the trade. So, easy and convincing trading during tough times.
It is an excellent option to diversify the portfolio of a trader. Traders can invest in metals and secure their future. Diversification is vital for less risk and more stability in the market. With the loss one trader can earn from others, traders can profit with some losses.
The liquidity is the plus point of these precious metals. They can be converted into cash at any time as the public is mainly interested in such securities. Moreover, it is a fast and comfortable trading process. Within no time, a trader can sell the asset in the market and get cash against them quickly.
Traders can trade with ease; the prices of metals are available with one click. Through technical analysis and tools, traders can know the future changes and have a strategy before investing. It’s an accessible and convenient trading platform. With these, the transaction costs of metals are also low. Traders do not pay extra to the brokers for such trades online.
Disadvantages of Trading Platinum
- They are highly unpredictable.
- Transactions costs are involved with the precious metals from shipping to making etc.
- Has no cash flow
How to trade platinum online?
Trading platinum online is simple and involves certain steps:
The first step of trading in platinum is to have a strategy to trade. Then, the brokers online trading platforms and analysis tools can set their strategy in advance and then invest.
The second step is to have a budget, the amount to be invested in the precious metal. The budget should be in consideration of the emotional aspects of the trader. If there is a loss, then the trader must be able to handle that.
The third step is the type of platinum the trader wants to invest in. Platinum is available in bars, coins and jewelry forms so that traders can choose as per their requirements. With the form, there are many designs of the coins of platinum.
The fourth step is broker, a broker that a trader goes trading with should be reputed and known in the market. These simple points are essential for a trade to be successful. Therefore, the best broker should be chosen and made an account with.
The fifth step is to sign up with a trading account and set risks and strategies by analysing the market. Again, there are stop-loss orders and other facilities for such problems.
Lastly, traders can start with their investment through the brokerage account and put up their first trade investment. For example, traders can invest in platinum with a minimum deposit in the account.
Trading Platinum can be profitable. Platinum is a precious metal that is traded online in several countries. Traders prefer investing in such commodities to earn big profits. CFDs are derivatives through which traders can invest and enjoy leveraged trading. It offers liquidity and portfolio diversification. CFDs help traders benefit from low costs and earn through the difference in asset opening and closing prices. The trade can range from a day to a month. Traders can decide whether they want to trade platinum for a long term or short term.