Pros & cons of investing in gold vs. platinum?

One might hope for slightly more rationality in the platinum market. Rarely does one hear talk of "platinum bugs", rants about how every society on Earth has valued platinum as the One True Valuable Thing (tm), or seen presidential candidates call for the return to the platinum standard.

It is only wise to invest in what you understand (ala Warren Buffett style). Depending on how much money you have, you might see fit to consult a good independent financial advisor instead of seeking advice from this website.

A famous quote goes:

“Those who say, do not know. Those who know, do not say”

Platinum use is pretty heavily overweight in industrial areas; according to the linked Wikipedia article, 239 tonnes of platinum was sold in 2006, of which 130 tonnes went to vehicles emissions control devices and another 13.3 tonnes to electronics. Gold sees substantial use as an investment as well as to hedge against economical decline and inflation, with comparatively little industrial ("real world", as some put it) use. That is their principal difference from an investment point of view.

According to Wikipedia's article on platinum,

... during periods of economic uncertainty, the price of platinum tends to decrease due to reduced industrial demand, falling below the price of gold. Gold prices are more stable in slow economic times, as gold is considered a safe haven and gold demand is not driven by industrial uses.

If your investment scenario is a tanking world economy, for reason of its large industrial usage, I for one would not count on platinum to not fall in price. Of course gold may fall in price as well, but since it is not primarily an industrial use commodity, I would personally expect gold to do better in such a scenario.

@Michael Kjörling answered why platinum is in demand like it is. But it missed some of the significant risks so I will address some of them.

Platinum is much more rare than gold. But not because there is less platinum than gold just that the known existing platinum veins are smaller and more disbursed. So if a large vein were found it could have a significant impact on the availability and thus reducing price of platinum. New mining technologies are being developed every day. One of these could make exacting platinum from existing non-platinum mines easier and more cost effective again increasing the availability and reducing the price of platinum.

The vast majority of platinum use today is for emissions controls. There is a lot of money being thrown into research on green energy and technologies. One of these technologies or a side effect of other research could result in much more cost effective ways to combat emissions. Should that happen I would expect the price of platinum to fall through the floor and potentially never recover.

I do not think any of these scenarios are imminent. But the risks that they present are so great it is important to consider them before investing.

"Why Investors Buy Platinum" is an old (1995) article but still interesting to understand the answer to your question.