Platinum prices are gaining momentum after years of underperformance. On May 21, 2025, spot platinum rose by $18 an ounce to $1,076, following a 5% hike on May 20, per Bloomberg data, as quoted on barrons.com. This move suggests a breakout from its prolonged trading range of $900-$1,100 an ounce, wherein it hovered for the major part of the last four years.
Gold Dominates, But Platinum Gains Ground
Despite the recent rally, platinum continues to lag significantly behind gold. Gold has jumped 36% over the past 12 months. In comparison, platinum has risen just 2% in that same timeframe, making it look relatively undervalued.
Fundamentals Turning Favorable
Investor interest is being bolstered by a recent bullish report from the World Platinum Investment Council. The World Platinum Investment Council projects a 6% decline in mined output this year to 5.4 million ounces, with the total supply, including recycling, at about seven million ounces.
Although total demand is expected to dip 4% to eight million ounces, that figure still exceeds supply. This imbalance is likely to continue in 2025, compelling the market to tap the shrinking above-ground inventories.
Bob Minter, director of investment strategy at Aberdeen Investments, said, “The fundamentals are finally getting reflected in the price.” His firm manages the Abrdn Physical Platinum Shares ETF PPLT, the largest U.S. platinum-based exchange-traded fund (ETF) with $1 billion in assets, as quoted in the above-mentioned source.
Tiny Market, Huge Potential
With gold prices out of reach for many, platinum is emerging as a more affordable alternative. Cheaper valuation than gold and supply constraints should boost the metal further. Gold trades at around $2,200 more than platinum.
Compared with gold, platinum is a much smaller market. The annual platinum supply totals about seven million ounces, while the gold supply exceeds 100 million ounces. This makes platinum more sensitive to changes in investment flows.
In the first quarter of 2025, investment demand for platinum skyrocketed 300% to 461,000 ounces, and jewelry demand grew 9%, particularly driven by Chinese consumers. Platinum can act as a good substitute for white gold in items like engagement rings, making it attractive amid high gold prices.
Platinum ETFs in Focus
The PPLT ETF hit a new 52-week high on May 21, 2025, and has marked an 18% gain so far in 2025. It holds physical platinum and charges a 0.6% annual fee.
Other investment options include the $55-million GraniteShares Platinum Trust PLTM and the $200-million Sprott Physical Platinum and Palladium ETF SPPP. The PLTM ETF, too, hit a 52-week high on May 21, 2025.
Any Wall of Worry?
A key headwind for platinum is the decline in automotive demand due to electric vehicles (EVs), which do not use catalytic converters — one of the main applications for platinum and palladium. However, hybrid vehicles, which are gaining popularity, often use platinum, providing a counterbalance.
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abrdn Physical Platinum Shares ETF (PPLT): ETF Research Reports
Sprott Physical Platinum and Palladium Trust (SPPP): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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