Platin Future: Perspectives of an Underestimated Investment

The future of the platinum market promises interesting opportunities for patient investors. While the precious metal has long been overshadowed by gold, several factors indicate that platinum could play a more significant role as an investment in the long term. The year 2025 demonstrated this impressively: after a long period of stagnation, the metal experienced a sharp rally starting in June, pushing the price up by more than 100 percent.

The current market position of platinum and gold

To understand the future of platinum, it helps to look at the current market situation. As of early February 2026, gold is trading at around $4,850 per ounce, while platinum is about $2,045. This means gold is currently roughly $2,700 more expensive per ounce—a historically large gap between these two precious metals.

The long-term development reveals an intriguing picture: over ten years, gold increased by 331 percent, while platinum rose by 132 percent. However, in the year-over-year comparison (February 2025 to February 2026), the ratio shifts: platinum increased by about 110 percent, while gold only rose by 70 percent. This phenomenon can be explained by the spillover effect from gold: after gold prices soared, investors looked for cheaper alternatives within the precious metals segment and found them in platinum.

The platinum-to-gold ratio (the price relationship between the two metals) remained below 1 for more than a decade, indicating that platinum was under constant pressure. Despite the strong rally in the second half of 2025, this ratio remains below 1 in early 2026—signaling that platinum may be structurally undervalued.

Why platinum has an industrial future

The key difference from gold lies in industrial application. While gold primarily functions as an inflation hedge, platinum has significant additional uses across various industries. This is the key to platinum’s future.

Traditionally, platinum is mainly used in the automotive industry—about 39 percent of demand comes from this sector. The use in diesel catalysts was a major driver for a long time, but the automotive industry is currently undergoing restructuring. The decline in diesel demand led to weak platinum prices between 2015 and mid-2025.

However, the application spectrum is expanding rapidly. In the industrial sector (26 percent of demand), platinum is used in glass manufacturing, chemical industries, and fertilizer production. The jewelry sector (28 percent of demand) values the metal’s timeless elegance and durability. Especially promising are applications in future technologies:

• Hydrogen economy: The World Platinum Investment Council (WPIC) forecasts an additional demand of 875,000 to 900,000 ounces by 2030 solely from fuel cell vehicles and electrolyzers for green hydrogen. These technologies are seen as key to decarbonizing industry and transportation.

• Industry 4.0 and electrolysis: Platinum is needed for highly specialized electrolysis processes essential for green hydrogen production.

This long-term demand dynamic fundamentally differentiates platinum from gold and could significantly shape its future.

Supply crisis meets rising demand

The price explosion of over 200 percent in 2025 resulted from a perfect storm: a structural supply deficit coincided with surprisingly stable and partly increasing demand.

On the supply side, concerning trends are evident: South Africa produces about 70 to 80 percent of global platinum but struggles with underinvestment, power outages, and operational challenges. Mine production in South Africa fell by 5 percent in 2025, reaching the lowest level in five years. 2025 was already the third consecutive deficit year, with an estimated shortfall of 692,000 ounces.

Physical scarcity is clearly visible through high leasing rates and backwardation in the London market—classic signs of a tight supply. At the same time, platinum investments in bars and coins increased by 47 percent in 2025, and ETF inflows were substantial.

Price volatility and market structure

The extreme volatility of recent weeks highlights a key characteristic of the platinum market: illiquidity. With only about 73,500 open NYMEX contracts (equivalent to roughly $8.3 billion), the platinum market is significantly less liquid than gold, which has over $200 billion in open interest. This low liquidity amplifies both upward and downward movements.

On January 26, 2026, the price hit a new all-time high of $2,925 per ounce, then experienced a dramatic correction of up to 35.7 percent to $1,882 within just six trading days. A subsequent recovery brought the price nearly 20 percent higher within a day. Such extremes illustrate the opportunities and risks of investing in platinum.

Scenarios for platinum’s future

Projections for 2026 vary widely, reflecting uncertainty:

• Heraeus Precious Metals forecasts $1,300 to $1,800
• Bank of America Securities Global Research expects $2,450
• Commerzbank estimates $1,800

The WPIC expects a nearly balanced market in 2026, with total demand of 7,385 kilounzen and total supply of 7,404 kilounzen. This would be a stark contrast to the deficit years 2023–2025. However, WPIC also predicts that platinum deficits will return after this balanced year, at least until 2029. Above-ground stocks could therefore shrink significantly.

A critical assumption is the expected demand decline of 6 percent in 2026, especially in investments (-52 percent), as WPIC anticipates a weakening of trade tensions. Investment demand could be pressured by profit-taking at higher prices and possible liquidation of CME inventories. Meanwhile, demand for bars and coins is expected to grow by 30 to 37 percent, attracting long-term investors.

Investment strategies for different investor types

The future of platinum offers various approaches depending on investor profile and risk tolerance:

For active traders: The increased volatility compared to gold or silver can create interesting trading opportunities. Instruments like CFDs or futures allow flexible positioning. A proven strategy is trend following with moving averages (10-day and 30-day). When the fast MA crosses above the slow MA from below → buy signal; when it crosses below from above → sell signal.

Active risk management is essential when trading with leverage. As a rule of thumb, risk per trade should not exceed 1 to 2 percent of total capital. For example: with €10,000 total capital and a maximum risk of 1 percent (€100) per trade, using 5x leverage and a stop-loss at 2 percent below entry, the position should not exceed €1,000.

For conservative investors: Platinum can serve as a portfolio diversifier, as it has its own supply and demand dynamics and sometimes moves counter to equities. This can be useful for long-term diversification or hedging. Suitable instruments include platinum ETCs/ETFs, physical platinum, or platinum stocks. Portfolio weighting should be tailored individually, with regular rebalancing recommended.

Critical factors influencing further development

Several parameters will shape platinum’s future in the coming months:

• Federal Reserve monetary policy: Hawkish signals from Fed Chair Lisa Cook and the nomination of Kevin Warsh as next Fed Chair suggest a slower pace of rate cuts, affecting precious metals yields.

• US dollar development: A weaker dollar generally supports platinum prices, while a strong dollar puts pressure on them.

• Geopolitical situation: Tensions between the US and Iran, trade conflicts, and tariffs remain key influences.

• Substitution risk: If prices stay high, automakers may increasingly substitute platinum with palladium in catalytic converters.

• Structural supply shortages: Ongoing production bottlenecks in South Africa could limit downside risks.

Investors should also monitor leasing rates, as these serve as indicators of market mechanics and future price trends.

Conclusion on platinum’s future

Platinum presents a complex investment scenario with significant potential but also notable risks. The structural supply scarcity combined with growing demand in future technologies like the hydrogen economy could support prices long-term. Many analysts see platinum as fundamentally undervalued despite the price rally in 2025.

However, investors should not underestimate extreme volatility. The illiquidity of the platinum market can lead to rapid price swings in either direction. A clear investment strategy, robust risk management, and ongoing market observation are essential. Whether platinum becomes a better alternative to gold ultimately depends on individual goals and risk tolerance.