The most popular investment metals in terms of market dynamics are gold, silver, platinum, and palladium. While gold is held by central banks and has the most market awareness, platinum is far rarer and has equally compelling characteristics as a portfolio diversifier and an inflation hedge. For 2025, the outlook for platinum prices is bullish and the precious metal could be poised for a breakout due to supply factors, industrial applications, and investment demand.
Rarer than Gold
According to the Department of Earth and Environmental Sciences at the University of Waterloo in Ontario, platinum is among the rarest and most expensive of all precious metals.
“In nature, pure platinum is unknown and well-formed crystals are very rare. Platinum is typically found as nuggets and grains. Before hard rock supplies came on line, nearly the entire world’s supply of platinum came from the Ural Mountains in Russia from placer deposits …. At this time, platinum in quantity is limited to a few localities. 80% of the world’s current production comes from South Africa and the Sudbury Basin of Canada.”1https://uwaterloo.ca/earth-sciences-museum/resources/detailed-rocks-and-minerals-articles/platinum
Gold is not only significantly more abundant in the earth’s crust than platinum, it is more heavily mined. For every 1500 tons of gold that is mined globally each year, only 160 tons of platinum are extracted by comparison.2https://www.lebrusanstudio.com/blogs/arabels-blog/is-platinum-really-more-expensive-than-white-gold
Mining platinum is a deep underground process that requires blasting, heavy ore transporting, processing, and laborious refining. According to The Natural Sapphire Company, “It can take from eight weeks to six months to process a batch of ore, and it can take up to 12 tons (11 tonnes) of ore to produce a single troy ounce of platinum.”3https://www.thenaturalsapphirecompany.com/education/precious-metal-mining-refining-techniques/platinum-mining-refining
Varied Uses and a Supply Deficit
Much like gold and silver, platinum boasts a range of uses including in jewelry fabrication, electronics, industrial applications, and automotive catalysts. It is perhaps most renowned and coveted for its role in the construction of catalytic converters which reduce harmful emissions from a car’s exhaust system.
“Catalytic converters are installed in a vehicle’s exhaust lines, between the engine and muffler, where they are used to moderate the dangerous qualities of exhaust. Specifically, the autocatalysts that vehicles contain convert over 90 percent of hydrocarbons and carbon monoxide into carbon dioxide, nitrogen, and water vapor. They can also convert pollutants from diesel exhaust into carbon dioxide and water vapor, which is immensely helpful in reducing pollution.”4https://investingnews.com/daily/resource-investing/precious-metals-investing/platinum-investing/platinum-uses/
According to the World Platinum Investment Council (WPIC), overall platinum demand from the automotive sector which was 3.17 million ounces in 2024 and is expected to hit an 8-year high in 2025.
Platinum also plays a critical role in clean energy technologies, particularly as a catalyst in the production of ‘green hydrogen,’ a clean energy source produced by the electrolysis of water.
In addition, with changes in political leadership and economic policy and anticipated increased vehicle production and platinum investment demand, (particularly from China), the WPIC is forecasting a platinum supply deficit for 2025.5https://platinuminvestment.com/files/948874/WPIC_Platinum_Quarterly_Q3_2024.pdf
Like most precious metals, platinum prices are impacted by supply and demand factors as well as geopolitical tensions. With the world embroiled in multiple wars and global conflicts, platinum also functions as a viable safe haven asset. In addition, it has an inverse relationship with the value of the U.S. dollar and Wall Street. The Dow just experienced its longest losing streak in more than 50 years, and a rare metal like platinum offers critical portfolio protection against market corrections and stock volatility.
Trading platform Plus500, provides more insight into platinum’s key price triggers:
“Platinum prices can be influenced by various factors. These presumably include the value of the USD, as well as geopolitical instability, and economic tensions in major Platinum-producing countries. Changes in mining regulations in these countries and discoveries of Platinum mining sites can also play a role. Additionally, global economic growth, trends in jewellery, and demand from the automobile sector can contribute to platinum price fluctuations. Wider industrial uses of Platinum, recycling methods, and trader sentiment can further impact its pricing.”6https://www.plus500.com/en/instruments/pl/what-drives-platinum-prices~2
Platinum is also a highly liquid investment that is globally recognized — and easy to buy and sell. Platinum is available in physical form, i.e. platinum coins and bars or in alternative “paper” formats like mutual funds or ETFs which are backed by physical platinum bullion.
According to LiteFiance, the following factors also directly impact the price of platinum:
- Supplies from the main exporting countries. South Africa possesses 72% of platinum reserves, Russia accounts for 11%, Zimbabwe — 8%, and North America — 6%. China, Colombia, and Finland contribute 3% of global platinum production.
- US currency exchange rate. Platinum is quoted in US dollars. When the greenback weakens, platinum appreciates. Conversely, if the US dollar grows, the precious metal decreases.
- Investment demand for the metal from market participants: ingots, coins, ETFs.
- Investor sentiment in the commodities market.
- Technical indicators that help assess the current trend, volatility, and trading volumes of the asset.7https://www.litefinance.org/blog/analysts-opinions/platinum-price-prediction-and-forecast
Why Platinum is Undervalued
Many experts consider platinum to be undervalued due to the aforementioned supply and demand dynamics, its increased use in clean energy production, and its historical relationship to gold.
In addition, the Gold-to-Platinum ratio which reflects the proportional relationship between gold prices and platinum prices, indicates that platinum prices are considerably undervalued.
“The gold-to-platinum ratio is the price of gold divided by the price of platinum. It describes how many ounces of platinum are needed to purchase one ounce of gold, indicating the relative strength of gold prices compared with platinum prices. The indicator works just as the gold-to-silver ratio and it shows whether gold is undervalued or overvalued relative to platinum (and vice versa). When the ratio is low, it means that platinum is overvalued relative to gold. When the ratio is high, it means that platinum is undervalued relative to gold.”8https://www.goldpriceforecast.com/explanations/gold-platinum-ratio
The gold-to-platinum ratio’s all-time high was 2.55 and its all-time low was 0.42. The current ratio is 2.75, the widest on record.9https://www.macrotrends.net/2541/platinum-prices-vs-gold-prices For the past 40 years, the ratio has traded in the 0.8 to 2.0 range and spent a considerable amount of time below 1.0. The recent wide deviation could be an indication of an impending platinum price surge.10https://www.antiquesage.com/detailed-history-platinum-gold-ratio
The World Platinum Investment Council confirms platinum’s undervaluation and suggests that the precious metal is on the brink of a price surge due to the normalization of the automotive industry and extreme supply shortages:
“From a sentiment perspective, platinum, as a non-yielding asset, was hampered by tightening monetary policy undertaken by central banks to contain inflation through 2022 and 2023. While physical platinum purchases were impacted by reduced automaker purchases after a period of large inventory accumulation as a result of under-producing vehicles during COVID and the semiconductor shortage. There are early signs that automakers are returning to normalised purchasing patterns. This comes as platinum is forecast to enter the second year of a protracted period of market deficits, arguably boding well for upward pressure on prices and investor returns.”11https://platinuminvestment.com/investment-research/perspectives/with-palladium-oversold-and-platinums-attractive-fundamentals-both-metals-have-upside
Platinum prices are not only historically undervalued but significantly below both gold and palladium.
While gold continues to dominate the precious metals news cycle, platinum appears to be on the cusp of a significant price breakout. It is about 30 times rarer than gold and while it does not have the same history as a monetary standard, its value in industry, green energy, jewelry, medicine, and the recovering automotive sector are important price triggers that make it an extremely timely investment.
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1 https://uwaterloo.ca/earth-sciences-museum/resources/detailed-rocks-and-minerals-articles/platinum
2 https://www.lebrusanstudio.com/blogs/arabels-blog/is-platinum-really-more-expensive-than-white-gold
5 https://platinuminvestment.com/files/948874/WPIC_Platinum_Quarterly_Q3_2024.pdf
6 https://www.plus500.com/en/instruments/pl/what-drives-platinum-prices~2
7 https://www.litefinance.org/blog/analysts-opinions/platinum-price-prediction-and-forecast
8 https://www.goldpriceforecast.com/explanations/gold-platinum-ratio
9 https://www.macrotrends.net/2541/platinum-prices-vs-gold-prices
10 https://www.antiquesage.com/detailed-history-platinum-gold-ratio
