Platinum Surges 7.8% to 1,225.70 as Trade Talks Boost Demand

The precious metals market experienced a mixed performance on Monday, driven by heightened market attention to the progress of trade negotiations between China and the United States. While gold prices saw a slight increase supported by a weakening dollar, platinum emerged as the standout performer, surging by 7.8% to close at $1,225.70 per ounce. This marked a new high since May 2021 and followed a week of substantial gains, with platinum's cumulative increase reaching 10% over the previous week.

Despite ongoing geopolitical uncertainties, some analysts suggest that market expectations of a potential interim agreement between the two economic giants could pose a short-term risk to the gold market. If trade tensions ease, there is a risk that safe-haven funds could withdraw from the gold market, potentially impacting gold prices.

The platinum market is currently facing a supply deficit for the second consecutive year. Concerns over import policies due to the Trump administration's tariffs have driven a significant increase in U.S. platinum imports in the first four months of the year, directly pushing up platinum borrowing costs. This supply deficit, coupled with increasing demand, has contributed to platinum's strong performance.

After years of declining demand, the Chinese platinum jewelry market is showing signs of recovery. In April, China's platinum imports reached 11.5 metric tons, the highest monthly figure in nearly a year. This trend is expected to reshape the global platinum demand landscape as jewelers diversify their product offerings in response to rising gold prices. The increasing demand for platinum in China, along with the supply deficit, has contributed to the metal's strong performance.

The market's focus on the progress of trade negotiations and the fundamental supply-demand dynamics are likely to intensify volatility in the precious metals market. Investors should closely monitor the details of the China-U.S. talks, changes in China's physical demand, and the impact of global manufacturing recovery on industrial metal demand. These factors will play a crucial role in shaping the future performance of precious metals, including platinum and gold.