Platinum Spot Price (XPT)

Understanding The Platinum Price

What is the spot price of platinum?

The spot price of platinum is a fluctuating price used as the fair market value for platinum bullion at any given moment. This is wholesale value for a unit of platinum without any added premiums. The spot price is the benchmark used by producers, mints, and dealers when pricing their platinum products.

Platinum spot price frequently asked questions

How is the spot price of platinum calculated?

The spot price of platinum is a reflection of the forces of supply and demand in the platinum market. It is influenced by both the aggregate level of demand for platinum (from automakers, jewelers, and investors) as well as the available supply of the metal. While various other factors can cause a shift in supply or demand, the trade of platinum contracts on the futures market is probably the largest single driver of the platinum spot price.

How often do platinum spot prices change?

Platinum spot prices are changing all the time. They respond to the trading of platinum on exchange markets, which goes on constantly when all the exchange platforms around the world are accounted for.

What can cause the spot price of platinum to change?

Supply and demand are the primary determinants of changes in the platinum spot price, and most other smaller variables will fall under the umbrella of these two factors. Supply-side variables such as new mining operations and cuts in production can influence the spot price down or up, respectively. Demand-side concerns such as collectors’ interest in platinum coins and consumers’ taste for platinum jewelry can also have an effect on the spot price. Yet, the largest driver of demand for platinum is its industrial uses, particularly in the catalytic converters of automobiles, so the manufacture of cars can also affect the spot price of platinum.

What currency is the spot price of platinum denominated in?

Platinum prices are denominated in U.S. dollars, just as most other commodities traded around the globe are. (This is due in no small measure to the status of the USD as the world’s reserve currency.) The use of dollars eliminates the transaction costs of converting unlike currencies, as just about every country in the world holds dollars in their Forex reserves.

What amount of platinum does the spot price refer to?

Per tradition, precious metal spot prices are always measured by the troy ounce, an archaic system of weights. One troy ounce is equal to 31.1 grams, slightly heavier than the standard avoirdupois ounce.

Is the spot price of platinum universal?

Yes, the platinum spot price applies wherever you are in the world. Because the spot price is subject to influences from all corners of the global economy, it makes sense that this benchmark price would be applicable in real time anywhere and everywhere you go.

Why can’t I buy platinum at the spot price?

The spot price of platinum is the price at which mining companies are able to sell newly mined platinum. This means that all costs borne by mints and dealers (i.e. the cost of minting coins or doing business online) must be factored in on top of the spot price. If dealers were to sell platinum and other precious metals at their respective spot price, they would be unable to earn a profit, and thus be forced out of business.

Does the spot price include markups or shipping costs?

No, markups and other added costs are not included in the platinum spot price. The spot price also does not include any costs related to the processing and fabrication of the platinum into its bullion form.

Why are some platinum products priced so much higher than others?

Pricing for platinum products can vary depending on what form the platinum comes in, and whether or not the item has any collectible appeal. Generic platinum products will be priced close to their melt value (the spot price), as they are generally only purchased for their underlying precious metal content. Meanwhile, legal tender platinum coins or special platinum collectibles will have higher premiums due to the added labor and specialization involved in their production, which is why the difference in price arises.

How are the premiums over spot calculated? Are they the same for all platinum products?

No, premiums over spot vary from item to item, and are based on factors that include, but are not limited to, the following: the cost of fabricating platinum into a bar or coin; the added labor costs for detailed art designs; producer-to-producer (or miner-to-refiner) shipping expenses; and any collectible or numismatic premiums for scarce collectibles. Some more generic items may only be a few dollars over spot, while other rarer platinum products could acquire premiums in excess of 100% of their intrinsic value.

What are bid and ask prices?

The bid price is how much a dealer is willing to pay for a specific item, while the ask price is the amount the dealer is selling the item for. These values are for sight unseen products, and do not account for rare or unique versions of a product. The “dealer spread” between the bid and ask prices for the same item is often used as an indicator of that product’s liquidity.

What are platinum future contracts?

Platinum futures are contracts between two parties who agree to exchange a specific quantity of platinum for a specific price; it is a “future contract” because the agreement will be settled on a future date, often three months in the future. Platinum futures trade at expected metal prices at a future date, so a high volume of futures swaps can help pull spot prices up or down.

What is the NYMEX?

The NYMEX is a commercial exchange platform where commodities futures contracts are exchanged. In 1994 the NYMEX acquired the COMEX, which facilitates trades in precious metals futures. In 2008, the NYMEX was acquired by the Chicago Mercantile Exchange (CME). The futures contracts traded on the New York Mercantile Exchange can have an indirect effect on the prices of all commodities, including platinum.

What is the COMEX?

The COMEX is the commodities exchange that is located in New York City. Platinum futures (and futures of many other commodities) are traded daily on the COMEX, and have a significant impact on the current spot price of platinum. The COMEX operates as the commodities division of the New York Mercantile Exchange (NYMEX), which acquired the COMEX in 1994. Both the NYMEX and the COMEX are operated under the Chicago Mercantile Exchange (CME).

What is paper platinum?

"Paper platinum" refers to shares of electronically traded funds (ETFs) that can be exchanged for physical platinum upon demand. Typically, shares of platinum exchange funds are used by investors who engage in high frequency trading, and businesses that engage in the sale of platinum. In most cases, shares of platinum ETFs are never actually redeemed for tangible platinum due to fees associated with delivery. Instead, shares of platinum ETFs are typically sold, traded, or rolled over.

Do mining companies have any effect on the price of platinum?

Mining companies can only sell their platinum, and other precious metals, at the market spot price for platinum. However, because mining companies incur such large overhead costs for research and development, if spot prices fall to low, mining companies may decide to scale back production, which can act as an upward pressure on the spot price of platinum.

Is platinum traded 24 hours a day?

Yes, due to the global presence of commodities exchanges all over the world (i.e Hong Kong, New York, London), precious metals are traded on a 24-hour basis. This ensures that spot prices for precious metals, like platinum, are constantly fluctuating.

Is physical platinum taxed?

Purchases of physical platinum may or may not be taxed based on several conditions. If the platinum products are being shipped out of the state in which the dealer is located (in our case, Florida), then their is no sales tax. Also, there is no sales taxes on platinum purchases over $500, since these purchase are viewed as investment purchases rather than consumption purchases. Finally, platinum coins that carry a legal tender status in the United States, such as 1 oz Platinum Eagles, are also exempt from all forms of sales tax within the United States. International purchases may be subject to any value added taxes or import duties imposed by the governing authority where they are shipped.

Why are there separate prices for bank wire and credit card transactions?

Because precious metals dealers typically operate on slim profit margins with high volume, it is necessary to offer separate pricing options in order to provide our consumers with the lowest possible premiums over spot. Credit card companies typically charge between 3-4% for processing transactions, while bank wires typically only involve a nominal flat fee from your bank. Because of this, we encourage all of our customers to use bank wire whenever possible so that you may maximize the amount of platinum you receive from your purchase.

If the spot price increases just before I make my online purchase, am I going to be charged a higher amount?

Spot prices, and thus the prices of our products, are constantly changing due to volatility in the precious metals markets. Prices on our products are re-calibrated nearly every minute, and at the time of transaction, in order to reflect the true price as determined by the free market. So if the spot price of platinum increases just before you make your purchase, then your purchase price will increase as well. However, if the spot price decreases just before you make your purchase, then your purchase price will also decrease. For transactions that involve the use of bank wired funds, if you provide a valid credit card that can be authorized for 5% of the transaction, the price may be locked in during the intermediate period between when you place the order and when the funds actually arrive in our account. Once the the funds are received from your bank, the credit card authorization will be voided. For more information on bank wire pricing, see our policy on bank wires.

Does the monetary denomination of a platinum coin affect its overall value?

What makes a coin a “coin” is that it must be legal tender for the redemption of debts. Simply having a legal tender status, which makes a round piece of platinum a coin, will typically increase the overall value of the platinum itself. The specific monetary denomination of a platinum coin is usually related to the size of the coin itself, i.e. 1 oz Platinum Eagles have a face value of $100 and 1/2 oz Platinum Eagles have a face value of $50. However, the amount of face value assigned to an investment-grade bullion coin typically has little bearing on the total value of a platinum coin, since the intrinsic value is usually much higher.

Is it better to buy platinum online?

Buying platinum online has several advantage to buying at traditional “brick and mortar” locations. Because online precious metals dealers are able to save on the typical overhead costs associated with operating local stores, they are often times able to pass those savings onto consumers such as yourself. Typically, online dealers also carry larger inventories, which affords them an economy of scale that allows them to pass additional savings onto consumers. Furthermore, purchasing platinum online also allows you to shop and purchase at your own convenience 24 hours a day, 7 days a week; unlike traditional local stores which are usually only open during normal business hours.