The gold market appears to be in a holding pattern, with prices consolidating just below $3,400 an ounce. However, significant bullish momentum persists in the broader precious metals sector—especially if investors look beyond gold itself.
Gold has surged nearly 30% so far this year, prompting investors to explore opportunities further down the value chain. Silver has attracted considerable attention, trading near 13-year highs above $36 an ounce. Meanwhile, platinum is emerging as a compelling option, benefiting from a persistent supply deficit and growing investor interest.
On Wednesday, platinum futures hit a key milestone, climbing above $1,300 an ounce for the first time in almost five years. The metal has gained sharply over the past three weeks, breaking through an initial resistance level at $1,000 an ounce. As of the latest trades, July platinum futures stood at $1,326.50 an ounce, reflecting a nearly 45% increase year-to-date.
Nicky Shiels, Head of Research & Metals Strategy at MKS PAMP, highlighted that platinum’s rally is part of a broader global trend involving currency debasement.
“There is a growing search for US dollar hedges beyond gold. Silver and platinum are the next stage of this movement,” Shiels said.
Adding to platinum’s appeal is a significant supply shortage. The World Platinum Investment Council recently revised its forecast, projecting a supply deficit of 966,000 ounces for the year—up from the earlier estimate of 848,000 ounces.
Daniel Ghali, Senior Commodity Strategist at TD Securities, explained that this ongoing supply squeeze is intensifying the rally.
“As prices rise, inflows into physically backed ETFs further drain available supply, fueling the upward price momentum. This dynamic will eventually encourage increased metal recycling and unconventional sourcing, but the price point to trigger this is often higher than expected,” Ghali noted.
Automotive demand remains the dominant force behind platinum consumption, accounting for approximately 80% of global usage. However, analysts are also pointing to renewed strength in the jewelry sector, particularly in China, where platinum demand is rebounding amid high gold prices.
Bank of America commodity analysts observed that jewelry is the second-largest platinum market segment. They noted, “After years of declining demand, there are signs of a rebound in platinum jewelry interest in China. Rising gold prices are encouraging jewelers to diversify away from gold. Even a 1% shift from gold to platinum jewelry could boost demand by 700,000 ounces, nearly doubling the current supply deficit to 1.6 million ounces.”
With gold’s advance showing signs of plateauing, platinum’s impressive rally and fundamental supply challenges make it a metal to watch in the precious metals space moving forward.
