Spot platinum rises 5% to USD 1,422.63 per ounce.

Spot platinum rises 5% to USD 1,422.63 per ounce.

Platinum prices have surged, reaching USD 1,422.63 per troy ounce, marking a 5% increase since the beginning of 2024. This upward trend is primarily driven by supply shortages and robust demand, particularly from the automotive sector. According to the World Platinum Investment Council, the first quarter of 2024 saw the second-lowest total platinum output since data collection began, further exacerbating the supply constraints [1].

The automotive industry has been a significant driver of this demand, consuming 832,000 ounces in the first three months of 2024. This demand is attributed to slower substitution towards PGM-free vehicles and rising taxes on electric cars, which have deterred investors from switching to more expensive green alternatives [1]. The U.S. President Biden's recent announcement of additional levies on EVs from top producer China has also contributed to the demand for platinum [1].

Investment demand for platinum has also picked up, with traders hedging against inflationary risks. The World Platinum Investment Council forecasts an average annual deficit of 500,000 ounces until 2028, suggesting that supply shortages will continue to support prices [1]. Analysts at Heraeus note that while gold prices are consolidating, investors are increasingly turning to platinum as an alternative asset, with platinum's price momentum attracting significant attention [2].

The platinum-to-gold ratio has made platinum an attractive investment, with funds invested in gold now able to purchase nearly three times as much platinum. This shift in investor focus is evident in the futures market, where platinum open interest has surged by 34% since early May, compared to a modest 2% increase for gold. Similarly, platinum ETF holdings have grown by 1.17% to 3.22 million ounces, while global gold ETF holdings have seen a less significant increase of less than 0.5% [2].

BMO Capital Markets predicts that platinum's price could reach USD 1,500 per ounce by the end of 2024, suggesting a potential upside of approximately 10% from current levels [2]. This bullish outlook is supported by the continued supply shortages and the growing focus on platinum as an alternative investment. However, investors should remain cautious of potential price corrections due to speculative long positions nearing extreme levels [2].

In conclusion, the recent surge in platinum prices is a result of robust demand, supply shortages, and increased investment interest. As the market continues to draw down investor inventories, platinum prices may rise further, offering potential upside for investors.

References:
[1] https://tradingeconomics.com/commodity/platinum
[2] https://nai500.com/blog/2025/06/platinum-soars-as-gold-consolidates-investors-shift-focus-to-precious-metal-opportunities/