Posted on May 17, 2022
Platinum is a precious metal that all too often takes a back seat to gold in terms of popularity – but is actually rarer and in some senses more useful than its yellow counterpart. While platinum is certainly less well-known than gold, many investors recognize its unique qualities as an intrinsically-valuable asset.
Platinum has become a great alternative to gold for jewelry, though most people who want to invest in platinum will do so by buying platinum bullion bars or coins. Before purchasing platinum, however, you should have a firm grasp on how to actually purchase platinum bullion bars.
Platinum bullion is generally defined as high-purity platinum in any form: bars, coins, or rounds. What differentiates “bullion” from other forms of precious metal is that bullion is bought and sold, priced and valued, almost exclusively on its weight of precious metal.
Platinum bullion shares some of the same characteristics as gold and silver with a couple of notable advantages. Platinum is significantly rarer than gold and silver, so the available supply is much scarcer. Platinum mining operations are more limited than either gold or silver mines, so supply disruptions are significantly more probable.
Platinum is one of the “noble metals,” meaning it’s tarnish-free and virtually chemically inert. That makes it a valuable component for many medical applications.
In addition, platinum has many industrial uses, driving demand from manufacturing companies, whereas demand for gold comes primarily from investors and jewelry. Compared with silver, platinum is significantly more valuable per ounce, making it a more compact investment. Within the last two decades, platinum was more valuable per ounce than gold, but at the time of writing gold is the more highly valued of the two precious metals.
The different kinds of platinum bullion products are platinum bars, platinum coins, and platinum rounds. Platinum bars and rounds are rectangular and (usually) disc-shaped pieces of bullion that can be made by any mint and are valued only for their platinum content.
Platinum coins can only be produced by government mints and have an assigned face value or spending power in the government’s currency, making them legal tender (though face value is nearly always lower than the actual value of its platinum content).
Bars are an excellent choice for anyone interested in investing in platinum at the best price. All bullion products sell at a premium over spot price due to the costs of refining, minting, shipping, and storing the products. Bars offer the lowest possible premium over spot. Why? They are easier to manufacture and therefore cost refiners and mints less to make.
Bars are also easy to stack and store and come in a broader range of weights, both larger and smaller, than coins and rounds.
What are the options for buying platinum bars?
Platinum bars are available in a variety of weights. In addition to the “standard” weight of 1 troy oz, common platinum bar options include 1, 2, 5, 20, 25, 50, and 100 grams, and 1/2, 5, and 10 ounces. Bar options can also vary by brand or refiner/assayer. Some of the top platinum bar refiners include PAMP Suisse, Valcambi, Argos Heraeus, Engelhard, and Johnson Matthey.
Refiners and mints very rarely sell bullion directly to the public. After all, they want to spend their time making coins and bars – they’re not set up for retail logistics and customer service. So the optimal way to buy platinum bullion bars is from a reputable online bullion dealer like BullionMax. These online dealers will have the best selection, great pricing, and the convenience of 24/7 shopping.
Other online options for buying platinum bars include online auction sites (such as eBay) or from private sellers– where you pose a risk of buying from a fraudulent seller. You can buy platinum bars from coin shops, pawnshops, live auctions, and coin shows for those who favor in-person transactions (just beware of limited inventory and generally higher premiums over the spot price).
One of the primary considerations with any bullion purchase should be the price, precisely the premium over the spot price. You’ll always have to pay a premium over the spot price but should look for the best price, which you can determine by the markup.
Second only to price is purity. The purity standard for platinum bullion is 0.9995, which is also the minimum purity requirement for precious metal IRA inclusion. We wouldn’t recommend buying platinum at a lower purity (unless it’s intended as jewelry or for other non-investment purposes).
Shipping and packaging are other key components to consider before buying platinum bars. Especially if you intend to purchase online, you should know the shipping costs. You also want to be confident your bullion comes in the proper packaging to protect against damage and theft.
Another important consideration when buying platinum bars is storage. Before purchasing any platinum, make sure you know exactly where you’ll store your bullion. You can store your bullion in a home safe, at a precious metals depository, or in a bank safe deposit box. Even with the safest possible storage solutions, insurance is an absolute must for any bullion collection. Homeowner’s insurance coverage has very low limits for precious metals, so a separate insurance plan designed specifically for bullion is likely the best choice.
Finally, divisibility is a critical factor in choosing platinum bars, particularly if you want to use your bullion for bartering. While larger bars generally come with lower per-ounce prices, it can be extremely difficult to divide a large bar, making smaller bars better for trading. In this case, divisible bars, like the 25 g PAMP platinum bar, are an excellent middle ground.
You can simplify which platinum bars to choose by breaking down the decision into manageable steps.