Why Is Platinum Often Cheaper Than Gold?

Precious metals like platinum and gold have long captivated human interest, serving as symbols of wealth, beauty, and industrial utility. These two metals are frequently compared due to their shared applications in jewelry, investment portfolios, and various industrial processes. Understanding their relative value involves examining market dynamics, historical trends, and their distinct inherent properties.

Current Price Comparison

As of late August 2025, platinum is generally trading at a lower price per ounce compared to gold. The spot price for platinum is approximately $1,326.50 to $1,373.90 per ounce. In contrast, gold’s spot price is around $3,385.78 to $3,393.00 per ounce during the same period.

This difference indicates that platinum is currently trading at a significant discount to gold. Prices fluctuate constantly based on global market activity.

Historical Price Dynamics

The price relationship between platinum and gold has not been constant; it has varied considerably throughout history. For much of modern history, platinum typically commanded a premium over gold, making it the more expensive metal. This “platinum premium” was a consistent market feature.

However, this trend reversed in recent years, with platinum consistently trading at a discount to gold since around 2014. The current situation, where platinum is cheaper than gold, is a notable departure from its long-standing historical premium.

Influences on Platinum and Gold Prices

The prices of both platinum and gold are shaped by a complex interplay of supply and demand factors, economic conditions, and geopolitical events. While both are precious metals, their primary demand drivers differ significantly, leading to distinct price sensitivities.

Supply constraints play a substantial role in pricing. South Africa is the dominant producer of platinum, accounting for over 70% of the global supply. This high concentration means that political instability, labor disputes, or operational challenges in South Africa can have a pronounced impact on global platinum supply and, consequently, its price. Gold production is more geographically dispersed, with major contributors including China, Australia, and Russia, making its supply less vulnerable to disruptions in a single region.

Demand for platinum is heavily influenced by its industrial applications. The automotive sector, particularly its use in catalytic converters to reduce vehicle emissions, accounts for a significant portion of its demand. Other industrial uses, such as in the chemical, electrical, and medical fields, contribute a substantial portion of demand. Jewelry demand accounts for a notable percentage globally.

In contrast, gold’s demand is primarily driven by jewelry fabrication and investment. Gold is widely regarded as a “safe haven” asset, with investment demand and purchases by central banks playing a substantial role in its price. Its use in technology, mainly electronics, comprises a smaller portion of demand.

Economic factors also exert considerable influence on both metals. Gold tends to perform well during periods of economic uncertainty, high inflation, or currency devaluation, as investors seek its stability as a store of value. Platinum, with its stronger industrial ties, can be more sensitive to global economic growth forecasts and the health of the manufacturing sectors it serves. Geopolitical events can affect both metals by disrupting supply chains or altering investor sentiment, but their specific impacts often vary based on each metal’s unique demand profile.

Distinguishing Characteristics of Platinum and Gold

Beyond market prices, platinum and gold possess distinct physical and chemical properties that shape their unique applications and perceived value.

Platinum is significantly rarer than gold in terms of annual mining output. Approximately 250 metric tons of platinum are produced globally each year, while gold production hovers around 3,000 to 3,300 metric tons annually. If all the platinum ever mined were melted and poured into an Olympic-sized swimming pool, it would barely reach ankle-deep, whereas gold would fill three such pools. Despite this market rarity, platinum’s crustal abundance is slightly higher than gold’s.

In terms of density, platinum is notably heavier than gold. Platinum has a density of about 21.45 grams per cubic centimeter, while gold’s density is approximately 19.3 grams per cubic centimeter. This higher density means that a piece of platinum jewelry will feel substantially heavier than a gold piece of the same size. For instance, platinum can be about 34% heavier than 18-carat gold for the same volume.

Regarding hardness and durability, platinum (Mohs hardness of 3.5 to 4.5) is generally harder than pure 24-karat gold (Mohs hardness of 2.5). While platinum can scratch more easily than some gold alloys, it does not lose metal when scratched; instead, the metal is displaced, creating a patina. Gold, being softer, tends to lose metal when scratched or worn, which is why it is often alloyed with other metals to increase its durability for jewelry.

Platinum also boasts a much higher melting point of approximately 1,768°C (3,214°F), compared to gold’s melting point of 1,064°C (1,947°F). This makes platinum more challenging to work with in manufacturing processes. Purity levels also differ in common applications; platinum jewelry is typically 90% to 95% pure, while gold jewelry varies widely depending on karatage, such as 18K (75% pure) or 14K (58.3% pure).