Platinum prices are up over 16% year-to-date largely driven by persistent supply concerns and increasing demand from the automotive and energy sectors. And with gold prices at historic highs, platinum is becoming a viable and more affordable option for investors looking to hold a precious metal that is historically undervalued and significantly rarer than gold.
A Critical Supply Crisis
Platinum has been in a critical supply deficit for several years and in 2025, the global deficit will deepen due to weak recycling numbers and lower output from mines particularly in South Africa.1https://www.mining.com/web/lower-supply-will-push-platinum-deficit-higher-than-expected-in-2025-wpic-says/
According to the World Platinum Investment Council (WPIC), the platinum market entered a period of consecutive supply deficits starting in 2023 and estimates now suggest that above ground stocks will be fully depleted by 2029.
“The platinum market is expected to record a deficit of 966 koz this year, which follows a 992 koz deficit in 2024. The forecast platinum market deficit for 2025 has been increased from the 848 koz reported in the March 2025 Platinum Quarterly primarily due to upward revisions in global platinum demand. Supply risks remain a prominent theme in 2025. In Q1 2025, mining supply declined by -13% year-on-year to record its lowest output since Q2 2020 which was in the height of COVID lockdowns.”2https://platinuminvestment.com/supply-and-demand/platinum-quarterly
Persistent supply deficits are due to a variety of mining factors including declining ore quality, falling output, rising costs, and sporadic labor strikes. South Africa accounts for nearly 70% of global platinum production making world platinum supply dangerously reliant on a single region — this leaves the supply chain highly vulnerable to disruptions and shortages.3https://investinghaven.com/forecasts/platinum-price-forecast/
It’s important to note that about 25% of global platinum supply comes from recycling and those numbers have also decreased adding to the critical, supply crunch.
Rising Demand
Platinum has a host of uses and demand sources including electric componentry, medical devices, aerospace modules, sensors, optical technology, and utilization in chemical synthesis.
Platinum’s rarity, strength, durability, and high luster also make it a prime jewelry choice. It is hypoallergenic metal that is also tarnish resistant.
“Pure, rare, eternal – these qualities set platinum apart. In the late 19th- and early 20th-century royalty in both Europe and Hollywood, platinum has enjoyed a surge in popularity, particularly among bridal jewelry buyers. One of the more expensive metal choices, platinum sets itself apart by its strength, purity and bright white shine.”4https://www.jewelers.org/buying-jewelry/jewelry-buying-guides/jewelry-metals-buying-guide/platinum-jewelry
Investors are also embracing platinum in the new precious metals spotlight. According to the World Platinum Council investment demand rose a staggering 300% in the first quarter of this year, relative to last year.5https://www.barrons.com/articles/platinum-price-gold-adde2e2f While gold is currently more than triple the price of platinum, the latter is a much rarer metal and considered by many experts to be historically undervalued.
And in terms of its current price within the context of other precious metals, platinum has significant upside:
1) Platinum used to be two times more expensive than gold, but today, it is half the price of gold.
2) Platinum once traded at five times the price of palladium, but now palladium is at a higher price than platinum.
3) If platinum reverts to its historical premium over gold and palladium, prices could double or even triple from current levels.6https://www.sprottmoney.com/blog/future-of-platinum-price-good-investment-opportunity
Hybrid Cars and Hydrogen Energy
One of the most significant sources of platinum demand comes from the automotive industry and its use in catalytic converters:
“Platinum is used in catalytic converters. This helps reduce vehicle emissions by breaking down pollutants (nitrogen oxides, sulfur oxides, and carbon particulate matter). As emission regulations become stricter in North America, Europe, and Asia, more vehicles require these systems, increasing demand for platinum. Even as electric vehicles (EVs) become more common, hybrid vehicles still use catalytic converters, keeping platinum in demand. Platinum is also being used more frequently in gasoline engine catalysts, replacing palladium in some applications.”7https://www.azom.com/article.aspx?ArticleID=1238
According to Car & Driver, hybrids actually have more complex and valuable catalytic converter systems and even though they emit fewer emissions, they still produce the same toxic substances as normal internal combustion cars. And since catalytic converters perform better when they’re hot, hybrid catalytic converters have to be more advanced since the dual power source (gas and electric) engine produces less heat.8https://www.caranddriver.com/features/a61522315/do-hybrids-have-catalytic-converters/
Platinum also plays a critical role in what is called the Hydrogen Revolution which is the global shift toward hydrogen powered fuel cells as a new form of energy. Hydrogen energy is considered clean, versatile, efficient and renewable. And platinum is a critical component of this new clean-fuel energy source.
“Platinum serves as a critical catalyst in hydrogen electrolysers and fuel cells, enabling efficient energy conversion and storage. In proton exchange membrane (PEM) technologies, platinum plays a fundamental role in both hydrogen production and utilisation. PEM electrolysers generate hydrogen by splitting water molecules using electricity, while PEM fuel cells convert hydrogen into electricity, producing only water and heat as byproducts. The metal’s unique catalytic properties make it irreplaceable in these advanced technologies.”9https://discoveryalert.com.au/news/platinum-s-crucial-role-in-boosting-green-hydrogen-revolution/
In the coming ‘hydrogen economy’ and infrastructure where hydrogen will be a primary energy source replacing fossil fuels, platinum will be indispensable. So not only is this highly versatile metal in the midst of a supply crisis amid rising industrial and investment demand — it also at the center of a dramatic shift toward clean energy, decarbonization, and domestic power production.
With its strategic importance, rarity and extreme undervaluation — platinum seems poised for a major breakout according to Barron’s.
“Platinum prices are rising after a long period in the doldrums—and there could be more upside to the precious metal, which trades at a huge discount to gold … Platinum has long been off the investor map, but the recent rally could be the start of a longer term move on favorable supply and demand fundamentals. It won’t take much investment demand to move a market where the value of supply is just $7 billion annually.”10https://www.barrons.com/articles/platinum-price-gold-adde2e2f
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- https://www.mining.com/web/lower-supply-will-push-platinum-deficit-higher-than-expected-in-2025-wpic-says/
- https://platinuminvestment.com/supply-and-demand/platinum-quarterly
- https://investinghaven.com/forecasts/platinum-price-forecast/
- https://www.jewelers.org/buying-jewelry/jewelry-buying-guides/jewelry-metals-buying-guide/platinum-jewelry
- https://www.barrons.com/articles/platinum-price-gold-adde2e2f
- https://www.sprottmoney.com/blog/future-of-platinum-price-good-investment-opportunity
- https://www.azom.com/article.aspx?ArticleID=1238
- https://www.caranddriver.com/features/a61522315/do-hybrids-have-catalytic-converters/
- https://discoveryalert.com.au/news/platinum-s-crucial-role-in-boosting-green-hydrogen-revolution/
- https://www.barrons.com/articles/platinum-price-gold-adde2e2f
