Platinum's Epic Breakout: Who's Fueling the Forgotten Metal to 10-Year High?

TradingKey - As of 5 PM Beijing time on June 27, spot platinum prices reached a daily high of $1,435.60 per ounce, once again surpassing the historical highs seen in the past ten years. The price has surged over 52% year-to-date, outperforming other major precious metals such as gold (up over 27%), silver (over 25%), and palladium (over 21%).

(Source: Investing)

The strength in platinum prices is a result of both the dynamics of substitution for gold and supply-demand imbalances.

As gold prices fluctuate at high levels, investors are turning to the lower-priced platinum as an alternative haven, leading to a shift in funds. Meanwhile, the recovery of China’s jewelry market has resulted in a surge in platinum jewelry sales. In Q1 2025, China surpassed North America for the first time to become the world’s largest retail investment market for platinum, with demand for platinum bars and coins rising by 140% year-over-year.

Furthermore, platinum's strategic value is being enhanced by its role as a core catalytic material in hydrogen energy economics — specifically in electrolysis and fuel cells — driven by energy transition initiatives.

Over 70% of global platinum production comes from South Africa; however, output from South Africa declined in Q1 2025 due to issues such as power shortages and strikes, creating supply tightness. Additionally, challenges are arising in automotive catalyst recycling supplies, with global platinum recovery expected to decrease in 2025, further exacerbating the supply-demand gap.

Worryingly, global above-ground platinum inventories have dropped to historically low levels that can only meet three months’ worth of market demand; significant spot premiums and high leasing costs reflect this extreme supply tightness.

The World Platinum Investment Council (WPIC) forecasts that shrinking platinum supplies will remain a core trend throughout 2025. Total supplies are expected to decline by 4% year-over-year to 218 tons — the lowest level seen in five years.

The rising price of platinum has also attracted speculative capital into the market, with short covering intensifying upward momentum. However, some market analysts caution that the relatively small scale and weaker liquidity of the platinum market compared to gold and its imperfect recycling market pose higher investment risks than those associated with gold.