Shore Collectibles
By Douglas Keefe, President of Beachcomber Coins
A recent Wall Street Journal article dealt with platinum, its’ history and future potential. Historically, platinum was the most expensive of the three precious metals; gold, platinum and palladium, due to its’ scarcity and use in jewelry, industry and automobiles. Platinum is primarily used in catalytic converters containing 3-7 grams of the metal which are placed in the exhaust systems of cars and trucks to scrub and remove harmful pollutants; byproducts of combustion engines. Due to an interruption in the supply of platinum in 2008, the price rose to almost $2300 per ounce, but dropped rapidly to under $1000 per ounce once the supply problem was resolved.
The financial crisis of 2008 drove up the price of all precious metals until they peaked in 2011 (platinum did not reach its’ previous peak of almost $2300 per ounce, but still was higher than gold) and then continued a gradual decline when by 2015 platinum fell below $1000 per ounce and continued the fall to around $800 per ounce just prior to the Covid19 pandemic which once again spurred all metals to higher prices.
The decline in the price of platinum was caused by several factors. Since platinum was expensive, an alternative metal, palladium, was substituted for platinum in some catalytic converters, lessening the demand for the metal. (Ironically the price of palladium is now higher than platinum was in 2008, almost $2500 per ounce.) That coupled with a move toward electric vehicles further lessened the demand for platinum. And with the movement world wide toward eliminating gasoline powered cars and trucks, the need for platinum should decline further, or will it?
Since 2015 there has actually been a surplus of platinum on the market, but that surplus is rapidly disappearing because of the upcoming need for the metal due to the movement away from cars, industries and homes that produce pollutants. The “Green Deal” movement, as it is known. The proposed solution is the development of hydrogen fuel cells that can be used to provide power for cars, trucks and homes. The effort of producing hydrogen fuel cells has been underway for many years, but finally appears to be reaching a point of cost effectiveness.
Hydrogen fuel cells are created by taking water (H2O) and separating the hydrogen and oxygen atoms and storing the combustible hydrogen in a fuel cell. Platinum comes into play both through the electrolysis process of separating the 2 atoms and in the storage of the hydrogen in the fuel cell. There is 4 times more platinum required for the fuel cell for a car than in the catalytic convertor, and since the European Union and China are committing to the use of hydrogen fuel cells in the future, and since only platinum is suitable for use in the fuel cells, the future may see the price of platinum reach new highs.
Another thought concerning platinum, since palladium is so much more expensive than platinum, there may be a short term movement back to using platinum in catalytic convertors, however with the increased use of electric cars and soon trucks, that demand could be short lived. So, the future of platinum rests with fuel cells.
In 1997, the United States Mint, as an expansion of its’ Eagle program of minting coins in investment grade bullion, began striking platinum coins in 1 ounce, half ounce, quarter ounce and tenth ounce sizes and in both business and proof condition. In addition, bars of platinum are available to those who may want to invest. And a comparison I read concerning the amount of platinum in the world compared to gold, if you were to stand in a Olympic size swimming poll with all the platinum in the world, it would come up to your ankles, but all the gold in the world would fill 3 pools. I can’t verify the accuracy of that statement, but I would be available to try.
Current price of platinum as of the writing of this article $990.00 per ounce.
Douglas Keefe is the President of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles, formally located in the Shore Mall and now located at 6692 Black Horse Pike, Egg Harbor Township in the old Wawa building. They also have satellite offices for buying only in Brigantine (Saturday). Between them, they have over 70 years of experience buying and selling coins, collectibles in precious metals.
