Did you expect Platinum to be the costlier metal compared to Gold? You are not alone. Some eminent economists made the same mistake. This is because consumers remember from few years earlier when Platinum jewellery was premium to gold jewellery. Even now, Platinum credit cards are more premium compared to Gold Credit cards. Platinum tickets cost higher than Gold tickets at a play. Most such consumers would be shocked to learn that Platinum is now available at less than 50% the price of Gold.
As of October 2024, the price of Gold per gram in India is around ₹7,745, while platinum is priced at less than ₹3,000 per gram.
Gold's Overbuying and Platinum's Challenges
Over the past few years, gold has seen a significant surge in demand, particularly in India, where it is not only a financial asset but also a cultural symbol. This overbuying has driven up its price considerably. On the other hand, platinum has faced its own set of challenges. The supply chain for platinum has been disrupted by various factors, including geopolitical tensions and mining issues. These challenges have led to a supply deficit, making platinum relatively more affordable compared to gold.
Platinum's Potential for Growth
Despite its current lower price, platinum is poised for growth. One of the key drivers of this potential is its use in **hybrid vehicles and the automotive industry**. Platinum is a crucial component in catalytic converters, which help reduce harmful emissions from vehicles. As the automotive industry continues to innovate and produce more environmentally friendly vehicles, the demand for platinum is expected to rise.
The Hydrogen Economy and Platinum
Another significant factor that could propel platinum's demand is the “Hydrogen economy”. Platinum is essential in hydrogen fuel cells, which are seen as a clean and sustainable energy source for the future. As the world moves towards decarbonization, the demand for platinum in hydrogen production and fuel cells is expected to increase substantially.
Scarcity and Supply-Demand Gap
Platinum is a relatively scarce metal, and this scarcity is reflected in its supply-demand dynamics. The global platinum market is expected to post a deficit of 1.028 million ounces in 2024, with demand outstripping supply. This gap is projected to persist, driven by robust demand and limited supply.
In conclusion, while gold has traditionally been the go-to precious metal for many investors, platinum offers a compelling alternative. With its current affordability, potential for growth in the automotive and hydrogen sectors, and the ongoing supply-demand gap, platinum is a metal worth considering for your investment portfolio. At eBullion we offer Indians a unique platform to buy and sell platinum, making it easier for you to diversify your investment portfolio with this valuable metal.
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