Platinum extends gain as market shows further signs of tightness

Platinum extended this year’s surge to almost 40%, as the market strains under signs of tightness.

The price of platinum — used in jewelry and autocatalysts, as well as in the chemical and glass industries — rose as much as 4.6% to $1 275.45 an ounce on Wednesday. After trading largely sideways at around $1 000 for the best part of a decade, that’s taken the white metal to the highest in more than four years.

The gains come as the physical platinum market heads for another year of deficit, boosted by strong Chinese demand for a cheaper alternative to gold jewelry. A dramatic outflow of platinum to the US in the first few months of 2025 — over fears that imports would be subject to President Donald Trump’s tariffs — further tightened the availability of the metal in the largest spot trading hubs of Zurich and London.

The implied cost of borrowing the precious metal for one month peaked in data going back six years at an annualized rate of 15%, while forward prices for platinum are trading a steep discount to spot, both indications of tightness.

Platinum output in South Africa — by far the world’s biggest producer — has declined this year amid heavy rains and other disruptions. That’s helped to underpin the price gains, boosting the shares of miners such as Anglo American Plc spinoff Valterra Platinum Ltd. and its rivals Impala Platinum Holdings and Sibanye Stillwater.

Those producers have come under pressure from the worldwide rollout of electric vehicles, which don’t use either platinum, or its sister metals, palladium and rhodium. The biggest single source of demand for platinum is as an input into autocatalysts, which curb emissions from combustion engines in gasoline and diesel vehicles. That continues to weigh on the longer-term demand outlook.

Meanwhile, gold edged higher even after the US and China said they had agreed on a plan to ease trade tensions during talks in London. US Commerce Secretary Howard Lutnick and China’s trade representative Li Chenggang said the two sides had agreed in principle on a framework to implement the consensus they reached in Geneva.

Bullion rose 0.2% to trade around $3 329.03 an ounce as of 12:03 p.m. in London. The Bloomberg Dollar Spot Index was steady. Silver fell, while palladium rose.

The detente between the world’s two biggest economies should be negative for haven assets like gold, and the lack of downward movement in bullion suggests investors are waiting for more developments.

Investors are looking ahead to an auction of US Treasuries on Thursday, with weak demand potentially boosting gold’s haven appeal.

© 2025 Bloomberg

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