November 14 2025
After 17 years of declining prices since a peak of $2.200/ounce in the summer of 2008, the platinum market appears to be on the verge of a powerful rebound. For years, platinum has been overshadowed by rising gold and silver prices. The continued decline in platinum prices has been driven primarily by declining demand from industries, including automotive, jewelry, and investment. However, a positive change now appears to be underway. Demand is starting to pick up again and supply is under increasing pressure.
Automakers have significantly reduced their platinum inventories in their quest for fully electric fleets. However, the transition to electric vehicles is not going smoothly. At the same time, automakers are pursuing a just-in-time policy to meet their platinum needs, which can lead to price fluctuations and a sudden increase in platinum demand at the slightest disruption.
Investors have shown little interest in platinum in recent years. Several platinum ETFs saw net outflows from 2021 to 2023, but the situation seems to be changing since last year. Demand for platinum jewelry, which has been under pressure in recent years, mainly due to a decrease in demand from China, also seems to be improving.
Despite weak demand in recent years, the platinum market has been in global shortage for three years in a row. Low prices have made many platinum mines unprofitable, which is hampering supply. Both South African and North American producers have had to restructure and close mines. The situation deteriorated further in the first quarter of this year, with global platinum production down 13%, partly due to flooding in South African platinum mines following heavy rains.
Both the World Platinum Investment Council (WPIC) and Johnson Matthey are forecasting shortages in the platinum market for the third consecutive year. The WPIC predicts a structural deficit of 966.000 ounces, while Johnson Matthey expects a slightly lower deficit of 730.000 ounces for 2025. These estimates are subject to fluctuation due to market conditions, but the structural deficit remains in place for the third year in a row.
To compensate for these shortages, existing platinum stocks are being used. To keep the platinum market in balance, above-ground platinum stocks are expected to decline by 31% this year to 2,2 million ounces. These stocks are so low that they can only cover three months of global platinum demand. If this situation continues in the coming years, which is very likely, above-ground platinum stocks will be virtually depleted by 2028.
The combination of a declining supply of platinum and an increasing demand could create an explosive situation on the market. This week it was announced that China imported 11,5 tonnes of platinum in April. For comparison, only 180 tonnes of platinum are mined worldwide each year.
Bloomberg reports that more and more Chinese jewelers are switching to platinum. In the famous Shuibei jewelry market in Shenzhen, the number of platinum sellers has tripled in the past month. Due to the high price of gold and recent sharp price swings in gold jewelers are switching to cheaper platinum.
This marks a significant trend reversal that has been a long time coming. Since 2014, Chinese demand for platinum jewelry has steadily declined, from 2 million ounces to less than 500.000 ounces per year. By 2023, Chinese demand for platinum jewelry was down 75% from a decade earlier. Demand had become so low that it could only go up, which is what is happening now.
Although global demand for platinum jewelry has been steadily increasing in recent years, this has not compensated for the large drop in demand from China. A turnaround in this Chinese market is a major factor for a new bull market in platinum.
Chinese jewelers, customers and investors are now reconsidering their options due to the high gold price, bringing platinum into the picture. Chinese demand for platinum bars and coins also doubled in the first quarter of this year, making China surpass North America as the largest private demander for platinum, according to data from the WPIC.
Because the platinum market is significantly smaller than the gold market (annual platinum production is about 16 times lower than global gold production), a small outflow from gold to platinum can have a large impact on prices. China bought 11,5 tons of platinum last month, representing 6,3% of global annual platinum production. This news caused the platinum price to rise by more than 20% to over $5 per ounce on Tuesday, May 1.000.
Platinum price rose 20% to $5/ounce on Tuesday, May 1055. This keeps platinum in the trend of lower highs. However, platinum price is making a new attempt to break the multi-year sideways trend. There is also a subtle trend of slightly rising low prices since 2020.
At first glance, it may not seem like much. The constant fluctuations between 800 and 1200 USD have lulled many investors to sleep. However, if we zoom out to the long-term price of platinum, we see a very different picture, especially when compared to the evolution of the gold price.
Investing in platinum is a very interesting diversification for gold and silver investors. The undervaluation of platinum is historically unprecedented and will not last forever. Platinum is not only an industrial metal, but also a precious metal and a strategic metal. The recent increase in Chinese demand for platinum may be the starting signal for a long-term upward trend.
Why has the platinum price remained low for so long?
The price remained low due to a combination of falling industrial demand, declining investor interest and structural oversupply. The automotive and jewellery sectors in particular reduced their use of platinum, which put pressure on the price.
What makes the current situation different from previous years?
The combination of rising demand (especially from China), structural shortages and declining inventories is creating unique market dynamics. In addition, investors are reconsidering platinum as a strategic alternative to gold.
Is Now a Good Time to Invest in Platinum?
For long-term investors, this could be a window of opportunity. Platinum’s undervaluation relative to gold, combined with structural shortages and rising demand, points to potentially higher prices in the future.
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