Platinum prices rebound in 2025: Should investors reconsider this undervalued precious metal?

The precious metals market continues to rise, with gold stabilizing above $3,300/oz and silver breaking through $38. However, the platinum application market, also a classic investment metal, has long been overlooked by the market. Is this phenomenon reasonable?

Decade of Volatility Cycles: Why Is Platinum Lagging Behind Gold?

Once the most expensive precious metal, platinum’s price exceeded $1,500 per ounce in 2014, far surpassing gold’s price at the time. But in recent years, the trends of the two metals have reversed.

Gold experienced a strong upward trend, while platinum’s performance has been rollercoaster-like. In April 2025, gold hit a record high of $3,500/oz, while over the past decade, platinum has been highly volatile—dropping below $600 in early 2020.

Since then, platinum prices have oscillated around $1,000. But starting in early 2025, platinum entered a rally, reaching about $1,450/oz in July, signaling a shift in market sentiment.

Multiple Investment Paths for Platinum

Investors can participate in the platinum market through various methods:

Direct Ownership of Platinum: Buying platinum coins, bars, or jewelry. This method involves storage costs and transaction fees but provides ownership of physical assets.

Platinum Fund Products: Investing via ETFs or ETCs, which do not require physical storage and can be easily integrated into existing portfolios. Especially friendly for novice investors.

Mining Company Stocks: Investing in shares of platinum mining companies for indirect exposure to industry growth.

Derivative Instruments: Futures, options, and other complex financial tools suitable for experienced traders, but with high risks and rewards.

Contract for Difference (CFD) Trading: CFDs allow traders to speculate on platinum price movements with less capital. Leverage enables controlling larger positions with smaller investments but also amplifies risk.

Why Did Platinum Prices Surge Significantly in 2025?

Understanding this rally requires a look at platinum’s industrial uses. Unlike gold, platinum’s value is not only derived from scarcity but also from its extensive industrial applications—from automotive catalytic converters to medical implants, chemical raw materials, and hydrogen fuel cell manufacturing.

From January to July 2025, platinum prices rose from $900/oz to $1,450/oz, an increase of over 50%. The driving forces include:

• Supply disruptions in major producers like South Africa
• Structural supply shortages (demand outstripping supply)
• Extremely tight physical inventories (reflected in high leasing rates)
• Geopolitical uncertainties
• Unexpectedly stable demand from China and the jewelry sector
• Weakening US dollar
• Increased inflows into investment sectors (net ETF inflows)

Platinum Supply and Demand Forecasts for 2025-2029

According to the World Platinum Investment Council, global platinum demand in 2025 is expected to be 7,863 thousand ounces, while supply will be only 7,324 thousand ounces, resulting in a shortfall of 539 thousand ounces.

Supply growth is expected to be very limited, at just 1%, due to structural constraints in mining that are difficult to resolve quickly. However, recycling markets offer hope, with an expected growth of up to 12% in 2025.

Demand shows divergence:

Automotive, jewelry, and investment demands are growing modestly, while industrial use is expected to decline by 9%, leading to an overall demand decrease of 1% YoY.

Platinum vs. Gold: Which Is a Better Investment?

Both platinum and gold have their characteristics. Gold is favored for its inflation hedge and store of value, while platinum distinguishes itself with its timeless elegance and critical industrial applications.

From an application perspective, platinum’s demand is more diverse—used not only in automotive catalysts but also in medical implants, fertilizer production, and emerging fuel cell and green hydrogen technologies.

Platinum is much rarer than gold, which makes its long-term performance less impressive than gold’s. Since 2019, gold has continually hit new highs, while platinum has been stagnant for a long time. The platinum-gold ratio has entered a long-term negative zone for the first time since 2011.

The main reason for this phenomenon is the decline in diesel vehicle demand (platinum is mainly used in diesel catalysts). But in 2025, the situation reversed: platinum soared from $900 in January to $1,450, driven by a perfect storm of supply crises, stable demand, US dollar depreciation, and geopolitical risks.

Trading and Investment Recommendations

For active traders, platinum’s high volatility creates opportunities. CFD leveraged trading is a common approach. A basic trend-following strategy (using 10-period and 30-period moving averages) can generate clear buy and sell signals. When the fast MA crosses above the slow MA, buy; when it crosses below, sell.

Risk management is crucial. It is recommended to risk only 1-2% of total capital per trade and set stop-loss points. For example:

• Total capital: €10,000
• Max risk per trade (1%): €100
• Stop-loss: 2% below entry price
• Leverage: 5x
• Corresponding maximum position: €1,000

This approach helps protect capital even during consecutive losses.

For conservative investors, platinum can serve as a portfolio allocation tool. Its unique supply-demand dynamics and low correlation with stocks and other assets make it an effective hedge in certain scenarios. Suitable options include platinum ETCs/ETFs, physical platinum, or mining stocks.

The proportion of platinum in a portfolio should be determined based on individual risk tolerance. Given its high volatility, increasing overall portfolio risk, regular rebalancing with other precious metals and assets is advisable.

Investment Disclaimer: Prices of precious metals are subject to market fluctuations and may result in losses. This article is for informational purposes only and does not constitute investment advice.