'Gold fatigue': will platinum's rally continue after rising 44% in 2025

The cost of platinum at trading on June 19 reached its highest level since 2014, and the metal has already added 44% since the beginning of the year. The market is warmed up by high demand, fears of shortages and an overflow of investment from gold, but experts disagree: some believe the rally is sustainable thanks to jewelry and investment demand in China, while others warn of a risk of a price pullback of at least 17%.

Spot platinum prices rose more than 2 percent to $1350 an ounce in momentum trading on June 19, their highest level since September 2014, reported Bloomberg. The current quarter could be a record quarter for the precious metal in terms of appreciation, the agency noted. Platinum has risen 44% since the start of 2025.

The growth is due to sharp demand and expectations of limited supply on the market, explained Bloomberg. A sign of short-term shortage is the fact that metal with immediate delivery is trading more expensive than futures, explained Bloomberg.

Analysts cite another reason for the hype around platinum: it is becoming an alternative to investing in gold. Gold prices have risen 29% since the beginning of 2025: this has caused some investors to switch to platinum, said Vaihab Agarwal, head of product and innovation at Indxx, who was quoted by MarketWatch. The analyst called the shift "gold fatigue."

Jewelers are also "actively shifting" from gold to platinum due to metal costs and changing consumer preferences, especially in China, the analyst said.

At the same time, platinum is far ahead of gold and palladium in terms of its value explosion this year. In June, platinum rose in price by about 25%, while gold futures rose in price by only 2.8% and palladium by 9.4%, according to MarketWatch data from Dow Jones Market Data;

Gold, silver and palladium have benefited from continued fiscal spending by developed countries, which is undermining the value of those countries' respective currencies, said Robert Minter, Aberdeen Investments' director of ETF investment strategy. Minter said the price gains for the three metals since the beginning of the year have been impressive, but have lagged behind platinum's performance mainly because of demand for platinum jewelry in China, where jewelry is also purchased for investment purposes.

Further gains in platinum prices are possible, partly given that they are now well below the 2014 peak of $1500 and well below gold prices above $3300, Agarwal said. It is not too late for investors to capitalize on the platinum market, as the metal "remains undervalued compared to its peers," he added.

"With prices still well below historical highs, platinum represents a potentially lucrative trade for those looking to diversify their portfolio and ride the wave of structural changes in the precious metals market," the analyst said.

However, some analysts have doubts that the rally will last: for example, Goldman Sachs predicts prices will fall to a range of $800 to $1,150 an ounce, Bloomberg writes.

The current year could be the third year in a row when there is a "significant deficit in the platinum market of almost 1 million [troy] ounces with an annual market size of 8 million ounces," said Edward Sterk, director of research at the World Platinum Investment Council (WPIC). He is quoted by MarketWatch. WPIC predicts that the structural shortage of platinum will continue through 2029, Sterk says. Last year's supply shortage of 992,000 ounces was the deepest since 2013, and this year it is forecast at 966,000 ounces, the expert added. Rising investment and demand for jewelry contributed to the shortage.

The shortage could be alleviated by recycling: for example, catalytic converters with platinum group metals have been used in cars for about 50 years, said Leverage Shares researcher Sandeep Rao. Recycling now produces only a quarter of the world's platinum, he said. With more organized collection and recycling, that contribution could be doubled, Rao predicted.

Jeffrey Christian, managing director of CPM, disagrees that there is a shortage of platinum. He explained that in commodity research, market balance is usually calculated by subtracting the demand for manufacture or consumption from the total new supply - with investment demand not counted in the category of manufacture demand. Goods purchased for investment purposes are not used, but remain in their primary commodity form and are available for resale in the market. Much of the investment demand for goods is therefore "secret" and its "estimation is extremely difficult and fraught with potential errors," Christian added.