(Mike Maharrey, Money Metals News Service) Gold is soaring, hitting multiple new record highs. Silver is surging, having gained nearly 40 percent this year. But another metal is outperforming them both.
Platinum.
The metal is up just over 51 percent since the beginning of the year. Most of that gain has occurred since early June.
Investors are taking notice.
According to the World Platinum Investment Council (WPIC), global platinum coin and bar investment surged by a staggering 660 percent in the second quarter. This was driven by a dramatic 55 percent increase in platinum coin and bar demand in China.
Meanwhile, platinum jewelry demand grew by 32 percent in Q2, hitting the highest level since 2015 in H1.
This comes within a market that is already facing supply constraints.
The majority of platinum demand comes from the automobile sector. It is an important component in automobile catalytic converters. Auto demand for the metal hit a 7-year high in Q1. There was a contraction in automotive demand during the second quarter due to tariff worries, but automotive sector platinum demand only dropped by 2 percent.
Platinum is also used in electronics, medical technology, and the chemical industry.
Demand for the metal in hydrogen-based applications is rapidly increasing and is expected to grow by 19 percent this year. The recent budget bill passed by Congress included the continuation of the clean hydrogen production tax credit.
The global platinum market charted its third straight significant structural deficit last year, and we should expect these supply shortfalls to continue into the foreseeable future, according to WPIC.
Platinum demand outpaced supply by 995,000 ounces last year. That was 46 percent higher than forecast.
The WPIC expects a market deficit of around 848,000 ounces in 2025.
Above-ground stocks of platinum fell by 23 percent last year and are expected to drop another 25 percent this year. This represents less than four months of demand.
The supply deficit isn’t likely to ease soon. The WPIC notes that the metal is historically price-inelastic in the short term, meaning supply and demand don’t quickly respond to price increases.
“Despite this rally, we do not anticipate any meaningful supply or demand response in the near term. Our May 2025 Platinum Quarterly forecast a -4 percent year-on-year reduction in both total platinum supply and demand in 2025, and this view remains unchanged.”
WPIC Director of Research Edward Sterck said he didn’t think a recession would put a dent in the supply shortfall.
“The current deficit represents about 15 percent of annual global demand. I don’t see the economy weakening enough to impact 15 percent of global demand. A bigger contraction in the economy probably leads to a weaker U.S. dollar and a stronger gold price, and that will be beneficial for platinum in a play-through effect.”
Given the supply constraints, WPIC CEO Trevor Raymond said the investment case for platinum remains “compelling.”
“Platinum’s sustained, significant discount relative to gold continues to add to its appeal. This is especially true in China, where both jewelry demand and bar and coin demand are forecast to show exceptionally strong growth this year. The success of Shanghai Platinum Week, which achieved record-breaking attendance and is increasingly drawing an international audience, demonstrates heightened interest in platinum, both as an investment asset and as a critical mineral across multiple value chains.”
Before 2011, platinum was generally more expensive than gold. In 2015, this historical trend reversed with the spread between gold and platinum growing wider.
Platinum hit an all-time high of $2,213 an ounce in March 2008. This was higher than the record price gold hit in 2011.
It remains to be seen whether platinum will regain the price parity with gold we saw before the mid-2010s, but given the supply and demand dynamics, it is reasonable to be bullish on platinum in the near to mid-term.
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
