How is the spot price of platinum calculated?
Platinum is traded across multiple time zones and on multiple exchanges such as New York, Hong Kong, Zurich, and Sydney. The platinum spot price is calculated using the most active near month futures contract. This near month futures contract will not always be the front-month contract, but rather the near month contract with the most trading volume. Platinum trades nearly around the clock these days, and like many other commodities, is always in the process of price discovery around the globe.
If platinum is quoted at $1480, what exactly does that mean?
The spot price of platinum is quoted as the price for one troy ounce of platinum in U.S. dollars (USD).
Does platinum only trade in U.S. dollars?
Platinum prices are typically quoted in U.S. dollars (USD) per troy ounce. As with most commodities, platinum is usually quoted in USD, but prices may be converted to any local currency. For example, if one is located in the UK, they could simply take a current price of $1480 USD per ounce and convert that $1480 USD to British Pound Sterling (GBP) at current exchange rates to come up with the local currency price per ounce in England.
How often do spot platinum prices change?
The price of platinum is constantly changing based on market supply and demand, currency movements and other factors. The platinum spot price updates every few seconds during market hours. Between domestic and foreign exchanges, spot platinum prices update Sunday through Friday, from 6:00 PM EST to 5:15 PM EST each day. Spot prices remain static during that 45 minutes down period from 5:15 PM EST to 6:00 PM EST each weekday, as well as from 5:15 PM EST on Friday until 6:00 PM EST on Sunday. The price of platinum is in a constant state of discovery and can have extremely volatile periods.
What influences the price of platinum?
Many economic factors affect the price of platinum, including interest rates, macro-economic trends, indexes like as the Dow Jones Industrial Average, monetary and fiscal policy, foreign relations, and more.
What are bid and ask prices?
Bids represent an offer to buy, while Asks represent an offer to sell. If you are looking to buy platinum, you would pay the Ask price, while if you are looking to sell platinum, you would receive the Bid price. The Ask is always higher than the Bid, and the spread between the two prices is known as the bid-ask spread, which is a reliable measure of liquidity in any traded product. The general rule is the smaller the bid-ask spread is, the more liquid the asset is.
Are platinum prices the same all over the world?
Yes — the price of platinum is the same all over the world. Exchanges and markets can take the current spot platinum price in USD and convert the price to local currency.
Why have trading hours in platinum and other commodities expanded so much in recent years?
Commodities are obviously very widely traded vehicles for end-users, financial institutions and banks, as well as retail investors. With the pace of economic activity and commerce in modern society, it is important that market participants have access to markets where they have financial interests or price risk exposure.
Why can’t I buy platinum at the spot price?
Platinum and other metals are sold by dealers with a premium to the current spot price. When one is looking to sell metals to a dealer, the dealer may offer the current spot price or slightly below the spot price for one’s metals. The dealer premium, as it is often called, represents the price at which a dealer will buy platinum or other metals and the price at which a dealer will sell platinum or other metals. The difference between the spread represents the dealer’s gross profit.
What is a platinum futures contract?
Platinum does trade on several futures exchanges around the world. The term “futures contract” simply refers to the fact that the contract is for a specific commodity and for a specific delivery date in the future. The fact is, however, that most futures contracts these days are never delivered on. Although one can take delivery on many different futures contracts, the majority of contracts are closed out prior to expiration or are cash-settled.
Where are platinum futures traded?
Platinum futures primarily trade on the NYMEX with a lot size of 50 troy ounces.
Could I simply buy platinum futures contracts and take delivery of the platinum?
While technically one could buy futures contracts and take delivery on those long positions at expiration, it is not typically done. There is a very specific process for taking delivery on platinum futures contracts and there are also costs associated with it. In addition, one can only take delivery of exchange approved “good-delivery” products.
There are other platinum related investment products, as well. Platinum backed exchange-traded funds, for example, are designed to hold physical platinum and are purchased by some investors looking to gain exposure to platinum. These funds may not, however, closely track the price of platinum. In addition, when one buys shares in an ETF, they do not take physical delivery of any metal.
Do platinum prices move with silver and gold prices?
Although platinum will not always move with gold and silver, it often does as investors look to buy precious metals or sell precious metals. Of course, mining issues or other factors could potentially cause the price of platinum to move significantly different than the prices of gold or silver. In addition, platinum has different industrial uses that may affect prices. Platinum typically trades for a premium over gold prices.
Are platinum prices in a longer-term uptrend?
We suggest that investors always do their own research and due diligence when looking at any market. That being said, a chart of platinum prices going back to the year 2000 does seem to exhibit an uptrend in prices. Platinum did have a major collapse in prices back in 2008 which some attributed to the auto industry crises, but platinum prices then began a quick recovery in price.
Are platinum prices too volatile for the average portfolio?
What is considered too volatile these days? Platinum prices can exhibit volatility just as any other commodity can. In addition, stocks can exhibit a large degree of volatility at times, as well. Price volatility can be important but may not be as big of a factor for someone buying physical platinum products that are not leveraged with the intention of holding them as long term investments.
How many grams are in a troy ounce of platinum?
Platinum is measured in troy ounces. Each troy ounce contains about 31.1034768 grams which are slightly higher than a standard ounce which is only 28 grams.
How many troy ounces are in a kilogram of platinum?
There are 32.151 troy ounces in one kilogram of platinum.
Are physical platinum purchases taxed?
In the USA, certain states have sales tax on platinum bullion products. Depending on which state you are located in, and where you purchase your silver, you may be liable to pay sales or use tax on the purchase.
What platinum products have the lowest premiums?
When it comes to physical platinum, bars and rounds typically carry the lowest premiums over spot price. Platinum coins will usually carry a bit of an additional premium, due to the fact that they are government minted and also carry a face value in their country of origin.
Where can I buy physical platinum?
Right here on our website, of course. Wall Street metals offer a wide variety of quality physical platinum coins and bullion products at the lowest prices in the industry. Browse some of our selection at the links below
Please note that Wall Street Metals is the only major retailer in the industry currently offering FREE SHIPPING on all orders to the United States. This allows our customers to keep their transaction fees on platinum bullion purchases to an absolute minimum.
How much money do I need to buy platinum?
You can get started with as little as $100 (our minimum purchase). Because we offer many fractional platinum products, as tiny as 1 gram weight, investors do not need a full ounce worth of cash to get started.
Can I put platinum in my IRA?
Yes. We work with a number of Platinum IRA custodians who provide “self-directed IRAs”, which allow the investor to purchase physical platinum bullion and receive the IRA tax benefits on the investment.
Do platinum coins have any face value? Does this affect the price of platinum coins?
Yes, platinum coins do have face values. The United States platinum eagle, for example, has a face value of $100. This is the highest face value to ever appear on a United States bullion coin. The price of the coins, however, is based on the coin’s platinum content, not the face value.
Is the spot platinum price the price I pay when I buy platinum from a dealer?
No, as mentioned previously, the dealer will use the spot platinum price as a guide. The dealer will take into account current spot prices, as well as their cost on the coin or bullion, and then apply their markup. Dealer markups can range quite a bit. For some products, margins are razor-thin while for other products the dealer stands to make a larger profit.
What about buying platinum from a local dealer, will I be able to get a better deal?
There are many differences between brick and mortar coin shops and online bullion dealers. The fact is that online dealers typically have much lower overhead costs than a storefront operation. Lower overhead costs may equate to lower profit margins for competitive online dealers and smaller premiums for online bullion buyers. Because online bullion dealers have more overhead cost wiggle room, online dealers are often able to offer substantial savings to customers over brick and mortar coin shops.
If platinum prices are always on the move, how do I know what price I am buying at?
Each dealer may have different procedures when it comes to locking in prices on precious metals. A brick and mortar store, for example, may set prices at the beginning of the day and adjust those prices based on market movement.
Online dealers typically utilize a live price feed that automatically adjusts their prices. When buying platinum or other precious metals online, different dealers have different procedures when it comes to locking in a price. At Wall Street Metals, when you add products to your Cart, the product prices are “fluid” and will continue to change until you advance to Checkout.
Once you advance to Checkout, your prices are locked in and displayed on the right side of the checkout form. These checkout cart prices are frozen for 10 minutes while you complete the checkout process. If you take longer than 10 minutes to complete the checkout process, you will have the option to approve the new, updated prices to finalize your order.
I noticed on one dealer’s website that the price is cheaper if I pay by bank wire or transfer rather than a credit card. Why the price difference?
Online dealers typically work on very thin margins. By accepting credit card payments, an online dealer is responsible for merchant fees for each transaction. Typical merchant fee surcharges are higher than a bullion dealer’s entire product margin. Dealers, therefore, must charge more for credit card purchases to cover these higher merchant fee surcharge costs or the bullion dealers would operate at a loss and not be able to even offer the service at all.
Does a precious metals dealer always get to buy at spot prices or below and sell above spot?
No. Dealers often times have to buy products above the current spot price. They then look to resell them at a higher price to turn a profit. The amount of money that a platinum coin or bar may sell for above the spot price may be determined by supply and demand, scarcity and product condition.
Am I going to lose money buying platinum from dealers above the spot price?
Any investment carries with it the risk of loss. The price of platinum could go lower just as easily as it could go higher. When one buys an American Platinum Eagle, for example, the value of the coin may go up based on rising platinum prices, but it can also go up on rising coin premiums. That being said, coin premiums can also fall. The bottom line is, if one is looking to acquire platinum or precious metals, then paying dealer premiums is part of the equation that must be considered.
Is the stock market a key driver of platinum prices?
Platinum and precious metals at times exhibit a positive correlation to the equities markets and at other times exhibit a negative correlation. Overall, the correlation between precious metals and stocks and bonds appears to be quite low. This is one of the reasons that some feel precious metals can potentially play a valuable role in portfolio diversification.
I’m a new platinum investor. What products might have the most cost-efficient pricing and lowest premiums?
If one is looking to simply acquire as many ounces of platinum as possible, then simplicity is usually going to be best. Privately minted platinum bars and rounds will likely be the best bet. When it comes to bars, one will usually get the best available per ounce pricing by purchasing 1-ounce bars or larger.
The per-ounce cost will generally go down as the number of ounces purchased goes up. For example, a dealer currently has a 1-ounce platinum Valcambi bar selling for $1,533 and a 10-ounce varied brand platinum bar selling for $15,030. If you do the math, then the 10-ounce bar offers a savings of $30 per ounce.
Do platinum mining operations affect the price of platinum?
Absolutely. Platinum is a natural resource that must be mined, and any stoppages in mining can potentially cause supply shortages that in turn may drive prices higher. In addition, mining companies may adjust their operations based on profitability and current platinum price levels. If the markets are flooded with platinum supply, then mining companies may elect to scale back operations in order to soak up some existing supply and bring the supply and demand equation back into balance.
Are platinum prices manipulated?
The potential manipulation of precious metals prices has been a hot topic of debate for some time. One can search online for information on this topic and try to draw his or her own conclusions.
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