When people think of platinum, jewelry and the automobile industry are usually the first associations that come to mind. In actuality, however, platinum is found in one-fifth of everything we use in our daily lives. It is no surprise, then, that platinum’s multiuse functionality has earned its increased importance in the futures markets over the past few years. Platinum futures can be used as a hedging tool for both producers and consumers of platinum alike. Platinum futures also offer advantages like central clearing and transparency of price among traders. Due to scarce production, limited suppliers, and its role as an industrial metal, platinum futures prices can exhibit volatility.
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Platinum Facts
Platinum is a very rare metal and considered to be more valuable than gold. It is very resistant to both natural elements and electricity. Platinum mines exist across the globe, but its main production is concentrated in South Africa accounting for nearly 80% of the world’s supply. Russia and North America account for the remaining platinum supply. The largest consumer section for platinum is the international jewelry industry followed by auto catalysts. The United States is a heavy importer of platinum, with jewelry and automotive industries dominating market demand.
Source: Barchart
Last updated May 2013.