New Delhi: At a time when everyone’s focus is on the skyrocketing gold and silver prices, platinum has also recorded a significant surge. Platinum prices rose by nearly 70 percent this year, while gold recorded a rise of 51 percent and silver jumped 58 percent.
Although platinum prices have increased, the rates are still 28 percent below their peak of $2250 per ounce in May 2008. Platinum prices went down 8 percent each year in 2023 and 2024, while 2022 saw a modest increase of 10 percent.
Why did platinum prices rise?
The surge in platinum prices is due to a supply shortage and increased industrial and investment demand. This is likely to keep platinum prices rising for a long time. “Platinum is now catching up with gold. Some time ago, platinum was more expensive than gold. Now, gold is almost three times more expensive than platinum. People are using platinum instead of gold in jewelry. Also, the supply of platinum from mines is not increasing, which is causing a shortage,” Ritesh Jain, founder of Pinetree Macro, was quoted by Money Control as saying.
US Federal Reserve lowers interest rates
The surge in gold, silver, and platinum prices has been driven by factors such as global uncertainty, inflation concerns, and the disruption of the US government. The US Federal Reserve has lowered interest rates, increasing investor interest in non-interest-bearing assets like metals. South Africa is the world’s largest platinum producer. Heavy rains, power outages, and water shortages have reduced production by 24 percent. Lack of investment in old mines and a power crisis have further exacerbated the situation.
Problems in platinum mines
According to the World Platinum Investment Council, the global market is expected to face a 850,000 ounce shortage in 2025. This is the third consecutive year of supply shortages, creating market tensions. Demand-wise, platinum demand is growing. More than 70% of its use is in industries such as catalytic converters in vehicles and green technology. Kavita More, commodity research analyst at Choice Broking, was quoted by Money Control as saying that platinum will remain strong in 2025 and beyond. A shortage of 500,000 to 850,000 ounces is expected each year.