Precious metals bullion exchange BullionVault has reached an investment landmark in that its clients’ platinum holdings have hit the 2 t mark, worth almost $65-million at current prices.
While gold took the lion’s share of precious metals investment since January 2020, platinum investing has grown fast among BullionVault users on a proportional basis, the exchange states.
The quantity of gold belonging to BullionVault’s users has grown 21% by weight since the start of last year, with silver holdings up 49% and platinum 126% over that time.
Relative to last year's record inflows, investor interest in platinum, in particular, has remained strong throughout this year, the exchange notes.
BullionVault partnered with the World Platinum Investment Council in 2017 to add platinum to its investment platform, in addition to gold and silver.
Launched in 2005, the company now holds about $3.7-billion of physical bullion for 100 000 users from 175 countries.
Explaining the interest in platinum at the moment, BullionVault research director Adrian Ash says platinum investment has experienced significant growth over the last two years, particularly as the pandemic has caused uncertainty, leading investors to hard assets.
“Overlaying this is the platinum price, which continues to trade at an historic discount to both gold and palladium, offering an attractive entry point for some value-minded investors.
“Finally, we are beginning to see serious political and corporate engagement with the zero-carbon potential of hydrogen fuel cells, and that sentiment is feeding through to growing interest in platinum’s use in hydrogen applications such as electrolysers, stationary power generation and fuel cell electric vehicles,” he says.
Speaking to how growth has been driven by investors who are new to platinum versus those who have increased existing holdings, Ash notes that the company has witnessed both types of platinum holdings growth among pre-2021 owners and rising new interest this year.
As a percentage of all owners, the UK and Eurozone investors feature more heavily in platinum than they do in gold, perhaps because – with gold coins and small bars already exempt from sales tax – the value-added tax (VAT) savings enabled by BullionVault for platinum makes its proposition more efficient to cost-conscious buyers.
That said, UK and European Union investors also feature more heavily in platinum than in silver, which BullionVault also offers VAT-free, in contrast to coin and small bar retailers.
This suggests that the appeal of platinum's current pricing and its long-term industrial potential is better understood in Western Europe than elsewhere in the world.
Meanwhile, the price peaks at the start of this year saw customers briefly turn net sellers overall, and this autumn's highs also saw profit-taking spur a small outflow of platinum.
That short-term liquidation has not, however, dented the strong underlying growth in client holdings, and while platinum has become a more active two-way market sooner on BullionVault's live order board than gold or silver did, the vast majority of owners are treating it as a buy-and-hold asset.
Almost 90% of current client holdings were acquired at prices below today's level. Again, the sustained growth in those holdings suggests long-term confidence in platinum's prospects.
Ash says that 16 years of operation has taught the company that, in the end, it is the macro and wider financial outlook that tends to drive bullion demand.
“But while that means we do not try to project or forecast activity even one year ahead, we do believe that platinum's continued use in autocatalysts, plus its strategic and fast-growing role in the hydrogen economy, is likely to encourage fresh investment by a wider section of precious metals investors in 2022 and beyond.”