How to invest in platinum

Gold and silver are often the two precious metals most often chosen by investors for various reasons, but platinum is another choice that has grown in popularity over the past few years. With less information out there, and fewer investors to ask, it can be confusing to a beginner on how to invest in platinum. Below is a simple guide to answer that question, but as always our support team are on hand to help. Email any questions to support@bullionbypost.co.uk and we will be happy to help.

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Platinum investment

Once an investor has decided which metal, or metals, they wish to purchase, the question of ‘how to invest’ remains. Like other precious metals there are a few different choices you can make for a platinum investment. Below we explore some of the more common methods, looking at some of their advantages and disadvantages, in order to help you make the decision that best suits your investment needs and ambitions.

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Platinum bullion coins

Coins are a popular method of investing in platinum. Small in size and a relatively low outlay per unit, investing in a higher quantity of coins offers a flexibility that buying smaller quantities of large units sometimes can’t. There will always be a market for an internationally recognised, government-backed platinum coin such as a Canadian Maple Leaf or an American Platinum Eagle, making coins a convenient asset to liquefy when the time comes to cash in on your investment.

In recent years, The Royal Mint have also released a number of platinum bullion coins in their popular Britannia and Queen's Beasts ranges. As the UK's official coin mint, the coins enjoy the benefit of being exempt from Capital Gains Tax on sale, making them an excellent choice for British platinum investors.

At BullionByPost we stock a range of platinum coins for you to add to your investment portfolio, including some of the famous coins listed below:

Country	Name	Release Year
USA	American Platinum Eagle	1997- present
Canada	Canadian Platinum Maple Leaf	1988-2002, 2009- present
Isle of Man	Platinum Noble	1983-1989
Australia	Platinum Koala	1988-2010
China	Platinum Panda	1988-2005

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Platinum bars

Although the cost may be higher than coins, investing in platinum bars is a more efficient way of investing in the precious metal, especially when buying large amounts. The lower manufacturing costs involved in the production of bars alongside the absence of the sentimental value sometimes attached to coins means that bars will tend to come at lower premiums than coins.

BullionByPost stock brand new platinum bars in a range of sizes, from several well respected, LBMA-approved, international refineries including PAMP, Umicore, and Valcambi.

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Platinum ETFs

Similar to a gold ETF, a platinum ETF is a fund which sells shares in an amount of physical platinum. The main idea behind this type of asset is that it allows an individual to invest in platinum without the additional costs, i.e. premiums and storage, of holding physical metal.

As it is backed by physical platinum, an ETF share is usually worth very nearly as much as 1g of platinum bullion and will fluctuate in line with the spot price. An ETF investor can make money when the platinum price rises and lose money when it falls, in the same way that anyone who owns it in its physical form can.

It can be a convenient way to access the safe-haven that bullion is known to provide, as well as benefit from any potential increases in the metal’s value. However, while it is supported by platinum bullion assets, an ETF is not a contract entitling an investor to that physical commodity. An ETF shareholder effectively owns a debt that is supported by the ETF’s bullion assets, but they are not the rightful owner of any specific piece of platinum. This could mean that, in the worst case scenario where the fund fails, an investor may not be guaranteed to receive the value of their investment in either money or platinum. ETFs can also increase third-party risk not found in true physical ownership.

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As the UK’s No.1 Online Bullion Dealer*, we view bullion as the most sensible way to invest in platinum or other precious metals. Most investors in precious metals choose them as a portfolio diversifier- a way to secure a part of their wealth in a lower risk, physical asset whose value can’t totally disappear. For us it makes sense, then, to stick to the only form of precious metal that can truly deliver on this – physical, allocated bullion bars and coins.

Despite what can at first appear a daunting prospect, the process of how to invest in platinum is therefore actually relatively simple. Buy physical platinum, keep it safe for as long as you wish, then sell when you feel the time is right.

One thing to consider with platinum is the initial VAT cost, adding a 20% sunk cost to your initial purchase. Some dealers, such as BullionByPost, may take part in the VAT Margin Scheme however, which means second hand platinum can be sold with much lower premiums. If you're thinking about how to invest in platinum, second hand bars or coins could be a great choice. Out second hand platinum is sold over the phone only based on limited stock availably. Please call 0121 634 8060 to enquire.