Metal Prices
	GBP	USD	EUR
Gold	£1,528.94	$1,953.03	€1,786.54
Silver	£18.68	$23.86	€21.82
Platinum	£761.76	$973.00	€890.00

Platinum uses

Platinum has a range of uses, including electronics, automotive industry, dentistry equipment, jewellery, and bullion. The biggest use of platinum however is as a catalyst. Catalysts are materials that speed up chemical reactions and reduce the energy needed to convert a substance.

Today, mention catalyst and we are likely to think of car exhausts, and in particular their catalytic converters. In the case of vehicle exhausts, the metal turns nitrogen oxide and carbon monoxide into less harmful nitrogen, oxygen and carbon dioxide. This is essential in reducing the harmful fumes produced by traditional combustion engines in cars.

Figures from the World Platinum Investment Council show over 40% of platinum in 2018 was consumed by the automotive industry. The vast majority of this went into exhaust systems. Palladium, which is one of the platinum group metals, is also used in exhaust systems and has currently overtaken platinum use.

What is platinum used for?

As mentioned above, platinum is mostly used for car exhausts in catalytic converters, but the next-largest individual, platinum-consuming sector was jewellery, which used over 30% of the precious metal. The natural bright white colour, satisfying weight, hardness, and resistance to tarnishing makes it an ideal metal for jewellery. Plus, its rarity - both as a metal and in its usage - adds to its allure. In jewellery, the noble metal is usually a 90 or 95% alloy, mixed with copper, palladium, rhodium, iridium or titanium.

One use of platinum is as jewellery, shown here as platinum ring.

Classic Platinum Solitaire Diamond Ring from The Fine Jewellery Company

Excluding the automotive and jewellery producers, other industries collectively account for the second largest consumers. Many of these industries, including chemical, petrochemical (fuel), and electrical, also use the catalytic properties of platinum in their processing. It is used in the chemical industry as a catalyst for the production of nitric acid, silicone and benzene. It is also used as a catalyst to improve the efficiency of fuel cells.

Chart showing the uses of platinum.

The electronics industry uses platinum to make electrodes, electrical contacts for computer hard disks and thermocouples. It is also used to make optical fibres and LCDs, turbine blades and spark plugs, and in an alloy with cobalt it is used to produce strong, permanent magnets.

The healthcare industry exploits its hypo allergenic properties in pacemakers and dentistry. Plus platinum compounds are important chemotherapy drugs used to treat cancers.

Investing in platinum

Less than 1% of this precious metal is used for platinum investments. Most investors in precious metals turn instead to gold and silver. It is traded on the New York Mercantile Exchange and the Tokyo Commodity Exchange. It is not available on the London Metal Exchange.

There are very valid reasons why platinum should not be overlooked as an investment. Like other precious metals, it can provide investors with a safe haven investment and can help diversify their portfolios. Platinum is also far rarer than gold. Industrial demand for platinum is large, and still growing, but global supply is estimated to be only 1/10th that of gold.

Physical platinum metal can be bought by investors in the form of bars and coins. Most gold and silver refineries also produce platinum bars. For UK tax purposes, the bright white metal is treated akin to silver; platinum is subject to VAT but legal tender coins are exempt from Capital Gains Tax.

The choice in coins is more limited than with gold and silver but it is growing. In 1828, Russia produced the first and only circulation currency coins in platinum. Its high melting point made it difficult to illegally melt down and it remained in circulation for 17 years.

Today, legal tender coins are only minted for bullion investment purposes. Most popular are the Canadian Maple, American Eagle, Australian Koala and Austrian Philharmonic. British coins include the Queen's Beasts series, the Britannia, and the Isle of Man Noble.