MW How 'gold fatigue' has helped drive platinum prices up 44% this year
By Myra P. Saefong
Platinum prices have outpaced gold's record run
Platinum has far outpaced its metals peers for the month and year to date, as supplies of the commodity are expected to fall short of demand for a third straight year. But that's not the only reason for platinum's stellar price performance.
Gold prices have climbed 29% so far this year. That's led some investors to rotate into platinum, said Vaihab Agarwal, head of product and innovation at global index provider Indxx, referring to the shift as "gold fatigue."
Jewelers are "actively switching from gold to platinum due to cost and changing consumer preferences, especially in China," Agarwal told MarketWatch by email.
To be sure, a long-running deficit in global supplies continues to be the biggest reason behind a 44% rise in platinum prices year to date as of Wednesday. Based on the most active futures contract (PLN25) (PL00), the metal settled at $1,313.10 an ounce Wednesday - its highest finish since September 2014, and up nearly 25% so far this month, according to Dow Jones Market Data.
Prices for gold and sister metal palladium have been rising too, but those performances pale in comparison. Gold futures (GC00) (GCQ25) have climbed just 2.8% so far this month, while palladium futures (PA00) (PAU25) have gained 9.4% for the month and nearly 17% for the year.
Gold, silver and palladium have all benefitted from continued fiscal spending in developed markets, which undermine the value of the respective currencies in those developed markets, noted Robert Minter, director of ETF investment strategy at Aberdeen Investments.
Year-to-date gains for those three metals are impressive but lag platinum's performance, he said, primarily because of platinum-jewelry demand in China, "where jewelry is also purchased for investment purposes."
Tight supplies
Data from the World Platinum Investment Council (WPIC) shows that 2025 is expected to mark a third consecutive year of a "material platinum-market deficit of almost 1 million [troy] ounces in an 8-million-ounce annual market," said Edward Sterck, director of research at WPIC.
"The platinum market is in a structural deficit," he told MarketWatch, and the WPIC forecasts that it will remain in a "meaningful" deficit through 2029. Last year's supply deficit of 992,000 ounces was the "deepest" going back to 2013, Sterck noted, adding that this year's deficit is forecast at 966,000 ounces. Growing investment and jewelry demand contributed to that shortfall.
The supply shortages have been met, in part, by supply from above-ground stocks - but those stocks, at about three months' worth of demand, are at "unsustainably low levels," said Sterck, adding that an increase in price has been "necessary in an attempt to attract more metal into the market."
So far, that hasn't been too successful when it comes to recycling. Catalytic converters, which are used in vehicle exhaust systems to reduce harmful emissions and contain platinum-group metals, have been enforced in vehicles for about half a century now, said Sandeep Rao, senior researcher at Leverage Shares.
That means there is substantial potential to replenish stocks from recycling, Rao said, thoough only about a fourth of global platinum supply comes from recycling. "A concerted effort to consolidate and normalize end-of-life recycling could double this contribution and stave off [a] supply squeeze from extraction constraints," he said, but that hasn't materialized yet.
About 90 metric tons of platinum, 300 metric tons of palladium and 30 metric tons of rhodium are used globally each year for catalytic converters - and 30% to 50% of this comes from recycling, according to Johnson Matthey.
Keep in mind, however, that there would probably be no supply deficit if investment demand was left out of the equation.
A report from commodities research and consulting company CPM Group shows that global platinum supplies were more balanced in 2024, with a surplus of 26,000 ounces. For 2025, CPM Group forecasts a surplus of 329,000 ounces.
In a YouTube video earlier this month, CPM Managing Director Jeffrey Christian said "platinum's not in a deficit, and there's no short supply of refined platinum available to meet demand."
Christian said there's a "misconception" that the platinum market is really tight on supply and that producers and scrap refiners can't keep up with demand, and that therefore prices should be higher.
Commodities-market research methodology is to calculate market balances by subtracting fabrication or consumption demand from total new supply - and investment demand is not included in fabrication demand, Christian noted.
That's because commodities purchased for investment purposes are not used, and remain in their primary commodity form and are available to be resold to the market. Most investment demand for commodities is "secret," he said, and "estimating investment demand is extremely difficult and fraught with potential errors."
In reality, there are enormous amounts of platinum stocked up around the world, said Christian, and fundamentals suggest surplus in platinum - including a fall in the volume of vehicles powered by diesel or gasoline, which use platinum-group metals in their catalytic converters.
Demand shift
Still, analysts noted that in more ways than one, they've seen signs of what Indxx's Agarwal referred to as "gold fatigue."
What's got the platinum market "excited is the potential for demand growth above what is in our estimates," according to Sterck at the WPIC, given mostly upside potential to investment and jewelry demand.
"Bar and coin investment demand in China is currently running ahead of expectations, but the market is most excited about the change to jewelry demand," said Sterck.
The "high price of gold is having an impact on gold-jewelry sales," which were down 32% year on year in China in the first quarter, he said. In contrast, platinum-jewelry fabrication rose 26% year on year in the first quarter as jewelers "look to attract customers back with better-value platinum products."
China imported 11.5 metric tons of platinum in April 2025 - the highest monthly volume in a year, according to Agarwal.
Further gains in platinum prices are possible, partly given that they're well below the 2014 peak of $1,500 and far below gold prices of more than $3,300, said Agarwal. It's not to late for investors to benefit from the platinum market as the metal "remains undervalued vs. peers," he added.
'With prices still well below historic highs, platinum offers a potential value play for those looking to diversify their portfolio and ride the wave of a structural shift in the precious-metals landscape.'Vaihab Agarwal, Indxx
And there are many ways for investors to gain exposure - ranging from physical platinum in the form of bars and coins, exchange-traded funds and futures contracts, to equities tied to platinum mining and hydrogen technologies, he said. Platinum catalysts are used in hydrogen fuel cells, and platinum ETFs include the Abrdn Physical Platinum Shares ETF PPLT.
"With prices still well below historic highs, platinum offers a potential value play for those looking to diversify their portfolio and ride the wave of a structural shift in the precious-metals landscape," said Agarwal.
-Myra P. Saefong
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June 18, 2025 16:48 ET (20:48 GMT)
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