Supply and Demand
Currently, platinum is the most undervalued precious metal. Platinum’s value is currently less than half the value of gold and is 30 times rarer. Gold is currently $2,450 per ounce and platinum is currently $1,000 per ounce. In 2008, platinum reached an all-time high of approximately $2,300 per ounce. With the exception of the past 15 years, platinum has consistently held a commanding value above gold.
Platinum has seen 4 consecutive years of supply deficits and is expected to reach the largest supply deficit in 10 years by 2025. With increased demand due to a push to green energy and the continued disruption in mining production, platinum deficits are expected to continue. Since 2023, platinum has gained approximately 16% in value. Currently, platinum’s price per ounce sits below its current price to produce. Indicating there is substantial upside potential for platinum moving forward.
Furthermore, the introduction of the GFEX futures in China will allow delivery against its platinum and palladium contracts. This will allow the ability to hedge and deliver platinum for industrial use and product fabricators. GFEX will further promote demand and broaden the base of platinum investors.
The Current Discount in Platinum
The platinum price per ounce in 1998 was $340 per ounce. Within ten years thereafter, platinum reached an all-time high of approximately $2,300 per ounce. Platinum gained approximately 550% in value between 1998 and 2008. Currently, platinum is $1,000 per ounce and the cost to produce platinum is approximately $1,150 per ounce. Making platinum an attractive value at this level. When choosing an investment entry point, investors should implement a strategy to buy low and sell high. The current value of platinum appears to be extremely low, and combined with the current supply deficits, should offer a great opportunity for upside potential.
Upside Potential
Platinum is the most undervalued precious metal. It is more undervalued than silver or gold. Currently, platinum costs more to produce than purchase. Although gold’s production cost is lower than platinum’s production cost and platinum is 30 times rarer than gold, the yellow metal’s current market value is over twice the market value of platinum. The current market value combined with platinum’s supply deficit, the global push for green energy, and the introduction of the GFEX, point to significant upside potential.
The following article is created by Orion Metal Exchange for the benefit of our investors and perspective investors alike. We seek to provide relevant content concerning precious metals and the impact caused by economic and geopolitical trends that will most likely impact your financial future. If you are interested in learning about precious metal investing, call 1-800-559-0088, for a FREE investor kit.
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