Vaibhav Agarwal, head of product and innovation at Indxx, was misspelled in an earlier version of this story.
As supply of the commodity are predicted to fall short of demand for a third consecutive year, platinum has outperformed its metals counterparts for the month and year to far. However, that’s not the only factor contributing to platinum’s exceptional price performance.
As of Wednesday, the price of gold had increased 29% so far this year. According to Vaibhav Agarwal, head of product and innovation at global index provider Indxx, this has caused some investors to switch to platinum, calling the change “gold fatigue.”
Jewelers are “actively switching from gold to platinum due to cost and changing consumer preferences, especially in China,” Agarwal emailed MarketWatch.
Undoubtedly, the primary cause of the 44% increase in platinum prices this year as of Wednesday is still a persistent shortage in worldwide supplies. According to Dow Jones Market Data, the metal ended Wednesday at $1,313.10 an ounce, its best finish since September 2014, and up almost 25% so far this month, based on the most active futures contract (PLN25) (PL00).
Gold and palladium, its sister metal, have also seen price increases, but those results are insignificant. Palladium futures (PA00) (PAU25) have increased 9.4% for the month and almost 17% for the year, while gold futures (GC00) (GCQ25) have only increased 2.8% so far this month.
According to Robert Minter, director of ETF investment strategy at Aberdeen Investments, gold, silver, and palladium have all profited from ongoing fiscal spending in developed nations, which devalues the corresponding currencies in those markets.
He claimed that although the year-to-date increases for those three metals are excellent, they fall short of platinum’s performance, mainly due to the demand for platinum jewelry in China, “where jewelry is also purchased for investment purposes.”
Limited supplies
In 2025, there would likely be a “material platinum-market deficit of almost 1 million [troy] ounces in an 8-million-ounce annual market,” according to data from the World Platinum Investment Council (WPIC), according to Edward Sterck, director of research at WPIC.
He told MarketWatch, “The platinum market is in a structural deficit,” and according to the WPIC, it will continue to be in a “meaningful” deficit until 2029. Sterck stated that the supply imbalance of 992,000 ounces last year was the “deepest” since 2013. This year’s deficit is expected to be 966,000 ounces. The demand for jewels and growing investment were factors in that deficit.
A price hike has been “necessary in an attempt to attract more metal into the market.” Sterck stated that above-ground inventories have contributed to the supply problems, but they are at “unsustainably low levels,” being at roughly three months’ worth of demand.
In terms of recycling, that hasn’t been very effective thus far. According to Sandeep Rao, senior researcher at Leverage Shares, catalytic converters, which include platinum-group metals and are used in car exhaust systems to minimize harmful emissions, have been required in automobiles for almost 50 years.
Despite the fact that recycling only accounts for around a fourth of the world’s platinum supply, Rao stated that there is significant potential to replenish stockpiles through recycling. He stated that “a concerted effort to consolidate and normalize end-of-life recycling could double this contribution and stave off [a] supply squeeze from extraction constraints,” but that hasn’t happened yet.
According to Johnson Matthey, between 30 and 50 percent of the 90 metric tons of platinum, 300 metric tons of palladium, and 30 metric tons of rhodium used annually for catalytic converters worldwide come from recycling.
But remember, if you take investment demand out of the equation, there probably wouldn’t be a supply deficit.
According to a report by the commodities research and consulting firm CPM Group, there was a 26,000 ounce surplus of platinum in 2024, indicating that world supplies were more balanced. The CPM Group projects a 329,000 ounce surplus for 2025.
Jeffrey Christian, the managing director of CPM, stated in a YouTube video earlier this month that “there is no shortage of refined platinum available to meet demand, and platinum is not in a deficit.”
According to Christian, there is a “misconception” that costs should be higher since manufacturers and scrap refiners are unable to meet demand in the platinum market due to a severe shortage of supplies.
Market balances are calculated using the commodities-market research approach, which deducts fabrication or consumption demand from the total new supply. Christian pointed out that investment demand is not included in fabrication demand.
This is due to the fact that goods bought for investment purposes are not used; instead, they stay in their fundamental commodity form and can be sold again to the market. According to him, the majority of commodity investment demand is “secret,” and “estimating investment demand is extremely difficult and fraught with potential errors.”
According to Christian, there is actually a huge global supply of platinum, and the fundamentals point to a surplus in the metal, including a decline in the number of cars that run on gasoline or diesel and have catalytic converters that employ platinum-group metals.
Change in demand
Analysts, however, pointed out that they have observed numerous indications of what Indxx’s Agarwal called “gold fatigue.”
Why is the platinum market doing well? According to Sterck at the WPIC, “excited is the potential for demand growth above what is in our estimates,” primarily because of the need for jewels and the potential for investment expansion.
“Bar and coin investment demand in China is currently running ahead of expectations, but the market is most excited about the change to jewelry demand,” stated Sterck.
According to him, the “high price of gold is having an impact on gold-jewelry sales,” which in the first quarter experienced a 32% year-over-year decline in China. In contrast, the first quarter saw a 26% year-over-year increase in platinum jewelry creation as jewelers “look to attract customers back with better-value platinum products.”
According to Agarwal, China bought 11.5 metric tons of platinum in April 2025, the most in a single month.
According to Agarwal, there is potential for further increases in platinum prices because they are much below both the 2014 top of $1,500 and the price of gold, which was above $3,300. Since platinum “remains undervalued vs. peers,” he continued, investors still have time to profit from the market.
“Platinum presents a possible value play for investors wishing to diversify their holdings and capitalize on a structural shift in the precious metals market, as prices are still far below historical highs.” Agarwal Vaihab, Indxx
Investors can obtain exposure in a variety of ways, he added, including stocks linked to platinum mining and hydrogen technologies, exchange-traded funds, futures contracts, and actual platinum in the form of bars and coins. Hydrogen fuel cells employ platinum catalysts, and platinum exchange-traded funds (ETFs) include the Abrdn Physical Platinum Shares ETF (PPLT).
“With prices still well below historic highs, platinum offers a potential value play for those looking to diversify their portfolio and ride the wave of a structural shift in the precious-metals landscape,” Agarwal stated.
