Investors are keen to buy platinum while it is trading for less than gold on a per ounce basis, with demand being driven by both investors and industrial offtakers, notes independent bullion dealer ABC Bullion MD Janie Simpson.
“This expected demand increase, up against a relatively static supply, points to future demand balances or deficits,” she adds.
Platinum’s numerous properties as a noble metal mean ABC Bullion expects more people to become curious about having exposure to the metal, especially because platinum’s investment case is intertwined with technologies that are likely to become crucial to achieving net-zero goals.
The inelasticity of platinum supply is a characteristic which adds to the long-term investment upside potential that investors see in this metal, Simpson notes.
As for platinum being regarded as either an investment asset or a precious metal, she says investors who are familiar with precious metals investing understand the unique properties platinum can offer. “As seen with our clients, investing in platinum is about benefiting from platinum’s duality – it is both a precious metal and an industrial metal.”
Furthermore, she says investors are using platinum to diversify their precious metal portfolios to gain exposure to different aspects of the global market. “As investors better understand how platinum’s role is crucial to technology, they see platinum as a way of investing in the future.”
In addition, Simpson says investors are already discussing platinum’s link to decarbonisation through its use in both electrolysers to produce green hydrogen, as well as in fuel cells.
As such, she says investors are seeing how these applications could create significant new markets, benefiting platinum demand.
“Awareness of platinum and its connection to hydrogen is only beginning to gain traction in Australia.
“That said, with the world’s first purpose-built liquid hydrogen cargo vessel arriving in Sydney [Australia] this week, which is an important development in establishing international markets for hydrogen, we expect platinum to pique investor interest even further as Australia’s potential role in the hydrogen economy is explored in earnest,” says Simpson.
ABC Bullion launched its own range of platinum bullion bars two years ago, which she says have been growing in sales month-on-month.
“We have been thrilled with the performance of our platinum range of minted tablets . . . Having this large range has also brought new clients to ABC Bullion who are interested in diversifying their precious metals exposure,” says Simpson.
At present, most of the demand for platinum that ABC Bullion is experiencing is from the domestic and New Zealand markets. In addition, there is a small, but growing interest coming from South East Asia.
ABC Bullion has an extensive range of platinum bullion products, with several coming on stream in 2021 and offering clients two sizes in the ABC Bullion Platinum CombiBars and five different-sized platinum minted tablets, ranging from one troy ounce through to 1 kg.
“The choice available means we are able to meet the needs of different investors, with the CombiBars being popular with those who like their fractional nature and flexibility. The more serious investor prefers the large 1 kg platinum bullion bars,” she says.