Platinum Hits 3-Year High: Can It Steal the Spotlight from Gold and Silver?

LONDON, June 6, 2025 - Platinum prices surged to a three-year high of $1250 per ounce on Friday, driven by robust industrial demand and persistent supply constraints, positioning the metal as a standout in the precious metals market. Outpacing gold's 18% and silver's 22% year-to-date gains, platinum's 25% rally in 2025 has caught investors' attention, fueled by its critical role in automotive catalytic converters and green hydrogen production.

As global economic uncertainty persists and supply disruptions in key producing regions worsen, analysts question whether platinum can eclipse traditional safe-haven assets like gold and silver.

Industrial Demand Fuels Platinum's Rise

Platinum's price surge is largely driven by its indispensable use in industrial applications, particularly in automotive catalytic converters, which account for 40% of global demand. Stricter emissions regulations in the European Union and China have boosted demand for platinum-based autocatalysts, with global vehicle production rising 7% in Q1 2025, according to the International Organization of Motor Vehicle Manufacturers.

Additionally, platinum's role in green hydrogen production, a cornerstone of the clean energy transition, has spurred investment, with global hydrogen projects increasing by 15% this year, per the International Energy Agency. These factors have propelled platinum prices, which have climbed steadily from $980 per ounce in January 2025.

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Supply Woes Tighten the Market

Supply constraints have further amplified platinum's rally. South Africa, which produces 70% of the world's platinum, faces ongoing labor strikes and power outages, reducing output by 8% in 2025, according to the World Platinum Investment Council. Russia, another key supplier, has seen exports drop due to sanctions related to its ongoing conflict in Ukraine, tightening global supply by an additional 5%.

These disruptions have created a market deficit, with demand outstripping supply by 300,000 ounces this year, a gap expected to widen if production challenges persist. This scarcity has driven speculative buying, with platinum futures contracts up 12% in the past month on the New York Mercantile Exchange.

Did You Know?
In 2008, platinum prices peaked at $2252 per ounce, driven by a supply crunch in South Africa and soaring demand for diesel vehicle catalysts, outpacing gold for a brief period.

Can Platinum Outshine Gold and Silver?

While gold and silver remain go-to safe-haven assets amid US-China trade tensions and geopolitical instability, platinum's unique position as both an industrial and precious metal gives it an edge. Gold hit $2750 per ounce, and silver reached $32 per ounce this week, but their gains are tied largely to macroeconomic fears, whereas platinum benefits from tangible industrial demand. However, platinum's volatility, driven by its smaller market size, poses risks.

Analysts at UBS forecast platinum could reach $1400 by mid-2026 if supply issues persist, but a global economic slowdown could dampen industrial demand, capping its potential. Industry data shows a split among investors, with $800 million flowing into platinum ETFs in 2025, compared to $1.2 billion for gold.