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Author Topic: Why is gold worth more than platinum  (Read 299 times)
jackg
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August 20, 2018, 10:45:08 PM
Last edit: August 20, 2018, 11:37:27 PM by jackg
Merited by dbshck (2)
 #1

OK, so the gold price seems to have grown and the platinum price seems to be growing at much of a shorter rate and I'm wondering why that is?

Platinum should be worth more as it's much less reactive (from a sciency viewpoint) and has a higher melting point so is harder to distill into a purer form.
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The Pharmacist
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August 20, 2018, 11:14:19 PM
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Platinum should be worth more as it's much less reactive (from a sciency viewpoint) and has a higher melting point so is harder to distill into a purer form.
You're attributing physical properties to a metal's price, and I don't think it really works that way. 

If I try to recall my inorganic chemistry class, I'm thinking that platinum is more reactive than gold--but it's been a long time since I took all those chemistry courses and I could be wrong. 

I do know that there are many platinum compounds, one of which is cisplatin, a very harsh chemotherapy drug.  There are some gold drugs for rheumatoid arthritis but I don't see them being used a lot anymore, certainly not as much as cisplatin.  In any case, platinum is a huge industrial metal used in catalytic convertors, and I think that outweighs gold's use in cell phones and electronics (I'm not a materials engineer though, so I may be talking out of my ass here).

The metals market is weird.  I don't know what drives it other than speculation and industrial use.  I think platinum is more useful for things, but I'm not totally sure.  I'm a collector and enthusiastic user of fountain pens, and there's nothing in the world like a 18K gold nib.  Platinum is used in some pens, but it's usually as a trim and is not used so much in nibs.  A big thing is that gold is a yellow metal, whereas platinum is silver-colored like many other metals.  In that respect, it's aesthetically appealing to many people, and kind of unique.
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August 20, 2018, 11:46:06 PM
Merited by suchmoon (4)
 #3

You're attributing physical properties to a metal's price, and I don't think it really works that way. 
Yeah, I don't usually analyse products on anything else other than thier mechanical/physical properties.

If I try to recall my inorganic chemistry class, I'm thinking that platinum is more reactive than gold--but it's been a long time since I took all those chemistry courses and I could be wrong. 
Nah, platinum is more inert than gold. Hence why it's used in a lot of electrodes for things like electrolysis and full cells.

I do know that there are many platinum compounds, one of which is cisplatin, a very harsh chemotherapy drug.  There are some gold drugs for rheumatoid arthritis but I don't see them being used a lot anymore, certainly not as much as cisplatin.  In any case, platinum is a huge industrial metal used in catalytic convertors, and I think that outweighs gold's use in cell phones and electronics (I'm not a materials engineer though, so I may be talking out of my ass here).
I think cisplatin has in some ways been replaced by other drugs for chemotheropy but I might be wrong there (it is a very vicious drug though but it contains a horribly strong halogen).
I think platinum might replace gold in phones and computers if its value remains lower than gold.
I can't find any of my books on the conductivity of metals but I think platinum conducts better than gold.

The metals market is weird.  I don't know what drives it other than speculation and industrial use.  I think platinum is more useful for things, but I'm not totally sure.  I'm a collector and enthusiastic user of fountain pens, and there's nothing in the world like a 18K gold nib.  Platinum is used in some pens, but it's usually as a trim and is not used so much in nibs.  A big thing is that gold is a yellow metal, whereas platinum is silver-colored like many other metals.  In that respect, it's aesthetically appealing to many people, and kind of unique.

That's very true, it's quite a desired metal.
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August 21, 2018, 05:11:13 AM
Merited by suchmoon (4)
 #4

Platinum has an odd place in the market because although it is regarded as a precious metal, most of the demand for platinum is actually for industrial and scientific purposes, so economically it behaves more like a base metal. In particular, unlike other precious metals such as gold, the price of platinum tends to fall during economic downturns, as demand for manufactured goods made from the metal drops.

The rise of electric cars is also starting to put a big dent in platinum demand - nearly half of all global platinum production is for catalytic converters, a market that will evaporate completely as fossil-fuel cars are phased out. This by itself probably accounts for the recent drop in the price of platinum, and it's only likely to fall further.
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August 21, 2018, 11:43:48 AM
Merited by jonemil24 (1)
 #5

This is a problem with the concept of money itself; it's too sophisticated for most people to understand. That's why money systems are so easily used to trick people; it's easy to fool someone when they're trading with something if they don't understand why it's valuable.

So, you can tell the average person that platinum (or bitcoins) are better money instruments as much as you like, it can be explained very quickly in just 1 or 2 sentences. They still won't bite, it's too sophisticated a concept, they won't get it. Precious metals advocates know this, and so they can tell a much simpler story about gold that doesn't involve monetary theory, and still succeed selling gold to people that don't get or don't care about what gives money value.
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August 21, 2018, 03:34:13 PM
 #6

I don't think it's the colour, because rhodium is another noble metal similar to platinum, and it is worth twice as much as gold. Gold has been used as currency for thousands of years, and it still retains its reputation as a hedge against inflation. In early Egyptian times copper was more valuable than gold, so custome can change. Silver is the strange one though, and I think it is very undervalued at the moment.

Prices are heavily manipulated as well. De Beers holds back massive quatities of diamonds to preserve the scarcity value for example.
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August 21, 2018, 05:35:04 PM
 #7

Nah, platinum is more inert than gold. Hence why it's used in a lot of electrodes for things like electrolysis and full cells.
I'll take your word for it, since I don't feel like looking it up, but I thought there were more platinum compounds than there were gold compounds.  I actually still have my inorganic chem text, so maybe I'll crack it open one of these days and have a look-see. 

Platinum is also used as a catalyst in organic chemistry reactions.  I recall that fact vividly from my college days (at least I think I do--it's been about 25 years since I took an orgo class).  Man I miss all that chemistry knowledge.  If you don't use it, you lose it.

I think cisplatin has in some ways been replaced by other drugs for chemotheropy but I might be wrong there (it is a very vicious drug though but it contains a horribly strong halogen).
It's been about 10 years since I've been in a hospital and have seen chemo orders, but last I knew cisplatin was definitely still one of the mainstays.  Hopefully biologicals will take over eventually because yes, cisplatin is some nasty, nasty stuff.  I don't think chlorine is particularly nasty in and of itself since swimming pools are loaded with Cl2.  Cisplatin is an alkylating agent, and the Cl groups have to dissociate first in order for it to do its job.  Not sure how toxic the free Cl is, though.

Love talking about metals on a bitcoin forum!  I don't have much chance for discussion of chemistry or even the precious metals market in my hermitic daily life.
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August 21, 2018, 07:33:34 PM
Merited by dbshck (3), The Pharmacist (1)
 #8

I'll take your word for it, since I don't feel like looking it up, but I thought there were more platinum compounds than there were gold compounds.  I actually still have my inorganic chem text, so maybe I'll crack it open one of these days and have a look-see. 

I dug out my GCSE log book and found this, so you no longer need to take my word for it :-).
But yeah you could do with continuing your studies if it's something you find interesting (I did a two year course in it above the level I already had for a nice way to relax while doing my other subjects - maybe I'm a bit weird).

Platinum is also used as a catalyst in organic chemistry reactions.  I recall that fact vividly from my college days (at least I think I do--it's been about 25 years since I took an orgo class).  Man I miss all that chemistry knowledge.  If you don't use it, you lose it.
I may have already lost some of that knowledge in a few months, need to start on my inorganic chemistry quiz book I reckon!

It's been about 10 years since I've been in a hospital and have seen chemo orders, but last I knew cisplatin was definitely still one of the mainstays.  Hopefully biologicals will take over eventually because yes, cisplatin is some nasty, nasty stuff.  I don't think chlorine is particularly nasty in and of itself since swimming pools are loaded with Cl2.  Cisplatin is an alkylating agent, and the Cl groups have to dissociate first in order for it to do its job.  Not sure how toxic the free Cl is, though.
Actually it might just be radiotherapy that they use instead when they can as that doesn't seem to be as horrible as cis platin actually is (although it is a lot more expensive and can cause a lot more damage if done wrong).

Love talking about metals on a bitcoin forum!  I don't have much chance for discussion of chemistry or even the precious metals market in my hermitic daily life.

If you like doing it then I'd question why you don't look at stuff like this.
There's a lot of universities in the UK that publish things online, there's a guy with excentric hair from Nottingham university who looks really cool - I think he's a chemist but he does physics videos too.
One of his videos is added to the bottom of my post here: https://fittotalk.com/english-talk/index.php?topic=187.msg766#msg766 or use
youtube

I don't think it's the colour, because rhodium is another noble metal similar to platinum, and it is worth twice as much as gold. Gold has been used as currency for thousands of years, and it still retains its reputation as a hedge against inflation. In early Egyptian times copper was more valuable than gold, so custome can change. Silver is the strange one though, and I think it is very undervalued at the moment.

Prices are heavily manipulated as well. De Beers holds back massive quatities of diamonds to preserve the scarcity value for example.

The history thing is certainly true and it's fame in some cultures - although I'm not sure it should have too much of a bearing on the price overall.

This is a problem with the concept of money itself; it's too sophisticated for most people to understand. That's why money systems are so easily used to trick people; it's easy to fool someone when they're trading with something if they don't understand why it's valuable.

So, you can tell the average person that platinum (or bitcoins) are better money instruments as much as you like, it can be explained very quickly in just 1 or 2 sentences. They still won't bite, it's too sophisticated a concept, they won't get it. Precious metals advocates know this, and so they can tell a much simpler story about gold that doesn't involve monetary theory, and still succeed selling gold to people that don't get or don't care about what gives money value.

I'm guessing that this is an example of things like futures and which are essentially an IOU note that says you own something when it exists only virtually.
Like banks taking loans from the main country's bank which are just an IOU that get a certain amount of small interest added (I would like it if they put that interest up somewhat to say 10% because then savers would earn a lot more on their money as I worked out recently that I'd earn more money putting my assets into gold with a fairly stable value as our currency inflates to 2.5% yearly than it would be to keep my money in a bank and get 1.5% yearly interest) only issue then is the liquidity of such assets.
The rise of electric cars is also starting to put a big dent in platinum demand - nearly half of all global platinum production is for catalytic converters, a market that will evaporate completely as fossil-fuel cars are phased out. This by itself probably accounts for the recent drop in the price of platinum, and it's only likely to fall further.

It's going to take a long time for them to be phased out and even then, those new cars will probably include a certain amount of gold or platinum in them.
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August 22, 2018, 03:07:19 AM
 #9

I don't think chlorine is particularly nasty in and of itself since swimming pools are loaded with Cl2.
Actually, most of the chlorine in swimming pools is (or should be) present as hypochlorous acid (HOCl), with free chlorine in the range of 2-4 parts per million, which is harmless (actual pool water nastiness occurs when hypochlorous acid reacts with organic contaminants in the pool to form chloramine and chloroform, which are not as harmless). Cl2 is nasty stuff, and is the reason why a mixture of acid and bleach is not the miracle cleaning solution some people think it is.



It's going to take a long time for them to be phased out and even then, those new cars will probably include a certain amount of gold or platinum in them.
The amount of platinum used in electric cars is minuscule. Even fuel cells only use a fraction of the platinum as catalytic converters. It won't even come close to matching present demand.
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August 22, 2018, 03:18:04 PM
 #10

I don't think use of gold for industrial purposes is what drives it's price.
It is a standard, a form of agreement that it is valuable, just like fiat. Of course it can't be printed like fiat by the governments so people use it more when trust in government's currency is low.

Gold is very much like money, just like Bitcoin. Most of it's value is not intrinsic, it is just an agreement that it is valuable.
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August 24, 2018, 12:43:46 PM
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I don't think use of gold for industrial purposes is what drives it's price.


Yes, last year only around 15 to 16% of the gold was used for industrial purpose according to this site - https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/

The most demand was from jewellery. That means mostly Indians and Chinese are buying more gold every year. What I know is recently many young Indians have not interested in gold so gold consumption in India is going down slowly.

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November 06, 2018, 01:20:35 AM
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Too many factors and apparently rife manipulation. How can one (bar possibly the manipulators) offer any real verifiable explanation. Although it does make sense that the automotive industry has taken it's toll. Just as silver was apparently crushed by photography..

I prefer platinum if you are talking watches/jewelry.  I also read that if you put all the platinum ever mined in the entire world into an olympic swimming pool it would barely cover your feet.

I expect $750 ish will be total bottom and I expect a big rise from there.


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November 06, 2018, 05:54:40 PM
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The price of Uranium is creeping up at the moment. I can't decide if that is good or bad.
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November 06, 2018, 06:06:55 PM
 #14

The price of Uranium is creeping up at the moment. I can't decide if that is good or bad.

Shall we get some jetty, we can share a concrete bunker for it?

Also, it’s probably good for people if less uranium is used on a general note (as it’s often used for electricity) although I suppose for the economy and for research it’s a bad thing.
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November 06, 2018, 06:13:31 PM
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I reckon they want it for bombs and Russian umbrellas. Smiley
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November 07, 2018, 04:17:40 PM
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Platinum is a precious metal, but it's also an industrial metal if you look at how it's used. In fact, the number one application of platinum is in the automobile industry where platinum is used in a catalytic converter (autocatalyst) to help control pollution from vehicle exhaust. A weakening economy can therefore hurt platinum demand.

On the other hand, gold is treated as a safe haven with very little use in industry. When times are uncertain for whatever reason, people tend to flock towards gold. This pushes up demand for gold to the point that gold becomes more valuable than platinum. This can be expressed by the platinum-to-gold ratio.

If the economy is relatively stable, the price of platinum tends to stay above gold. However, if economic prospects are perceived to be poor or weakening, gold will rise above platinum. Compared to gold, platinum is a much more volatile metal.

The whole article is available here
https://seekingalpha.com/article/2838276-platinum-cheaper-than-gold-may-signal-trouble-ahead-for-the-stock-market

I also like this explanation from another source.

Quote
Platinum may be less desirable as jewellery. Beauty is subjective.

Platinum does not really have a monetary history, unlike gold.

Platinum is not virtually indestructible, unlike gold.

Platinum has a more specialised industrial use, unlike gold.

Platinum may cost more or less to mine than gold, which plays a huge factor along with price to incentivise new mining and exploration.

To answer the question a bit more directly - I believe the main driving factor of the decline in Platinum price is the future expectation of decreased industrial use for the metal.

https://www.quora.com/Why-is-gold-presently-more-expensive-than-platinum
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November 07, 2018, 06:38:52 PM
 #17

@Pmalik, platinum is harder than god and therefore more indestructible than gold. I think both substances are quite weak in pure form however, so platinum is only a bit stronger when pure.
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November 20, 2018, 09:02:48 PM
Merited by Foxpup (6), dbshck (4)
 #18

Something to note, Platinum has historically been more valuable than gold, sort of a strange series of events going on with metals right now.

There are very few benefits that gold hold over platinum, the industrial uses are different, but besides market manipulation and other difficult economic factors to figure out, I'd say that gold holding a historical "gold standard" as a store of wealth is why someone would choose gold over platinum as a first instinct.

Platinum has some incredibly interesting and useful properties, however there are other "platinum group metals" like Palladium that can be used for nearly the same industrial uses. If the demand for platinum for industrial use increases, then industry will switch over to Palladium, until Palladium becomes more expensive, and then back to Platinum. Thats an over simplification, but it serves as an example for why the component of the value from industry has a certain shifting asymptotic value.

As far as jewelry applications go, I certainly believe that Platinum is sort of all around "better" than gold, at least structurally, you may prefer gold visually. 24 Kt gold is absolutely useless for jewelry, and you have to essentially cut it with less desirable metals. Platinum is often alloyed as well, but for slightly different reasons, and the purity is much greater than with gold in most cases. It also doesn't scratch and lose weight. Platinum has a sort of strange property where mass is displaced but not removed when damaged.

All of that said, spot price is just what a paper certificate on the stock market says the metals are worth. You don't find any metal at spot price (under normal situations) and Platinum holds more of a premium than most other metals. Its difficult to work and machine, so the costs associated with a hunk of platinum are greater than the same hunk of gold.
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November 21, 2018, 09:53:19 AM
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All of that said, spot price is just what a paper certificate on the stock market says the metals are worth. You don't find any metal at spot price (under normal situations)

China is changing that, and they have created an exchange that deals with physical gold. This seems to be another attack on the international bankers. Some people consider that 100 times the amount of gold in existence has been sold through the "virtual" exchanges, and this is why gold is undervalued at the moment. Silver is even more undervalued in my opinion. China has accumulated a massive store of gold, and it is rumoured to be about to announce a gold backed currency.
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November 28, 2018, 11:38:31 AM
Last edit: November 28, 2018, 12:10:50 PM by xtraelv
Merited by suchmoon (4)
 #20


All of that said, spot price is just what a paper certificate on the stock market says the metals are worth. You don't find any metal at spot price (under normal situations)

China is changing that, and they have created an exchange that deals with physical gold. This seems to be another attack on the international bankers. Some people consider that 100 times the amount of gold in existence has been sold through the "virtual" exchanges, and this is why gold is undervalued at the moment. Silver is even more undervalued in my opinion. China has accumulated a massive store of gold, and it is rumoured to be about to announce a gold backed currency.

Unless you have untraceable gold hidden in some secure location that you control it has no means of being a hedge against economic collapse.

There are many fraudulent scams that use "gold" in their name and that purport to have "gold backing".

Unless you have physical gold in your hand - you do not have gold. Just the illusion of gold.

If you pay for gold but do not have the gold then you just got separated from your cash fro a promise of gold. (A promise of gold is not the same as having gold).

Silver price was heavily manipulated by the Hunt Brothers in the 1980's and a Govenrnment bailout prevented the collapse of wall street bankers and mayhem on the silver market.
https://en.wikipedia.org/wiki/Silver_Thursday

China as a country is hoarding gold as a hedge and value store. China traditionally also has a obsession with gold.
I'm not sure if I would feel comfortable with a gold backed Chinese currency. It would give the Chinese government my money in a "promise of gold" on a piece of paper. They would have my money and my gold.  Shocked

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Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 (consumer price index, adjusted value of $391 today[4]) per troy ounce. Under the Trading with the Enemy Act of 1917, as amended by the recently passed Emergency Banking Act of March 9, 1933, violation of the order was punishable by fine up to $10,000 (equivalent to $189,049 today[4]) or up to ten years in prison, or both.

https://en.wikipedia.org/wiki/Executive_Order_6102

Personally I believe non perishable food is the "gold standard" if there is economic collapse. You cannot survive eating gold in a disaster but there will be people wanting to trade food for gold in a disaster.



https://www.moneymetals.com/precious-metals-charts/platinum-price

The US dollar, stock prices and Crypto investments were surging. It prompted a flight from speculative investments. Chinese interest in Gold has been keeping that price high as there has been more put into Bullion and investment by the Chinese in US Government bonds and US currency has declined.
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