Platinum as a Key Metal: Why Its Use in Future Technologies Attracts Investors

Global precious metals markets experienced remarkable dynamics in 2025 and 2026. While gold reached new all-time highs, platinum underwent an even more dramatic development. Starting mid-2025, platinum prices surged from below $1,000 to temporarily $2,925 per ounce — an increase of over 200%. This price explosion is not purely speculative but driven by fundamental factors: increasing use in future technologies like fuel cells and green hydrogen, along with structural supply shortages, form the basis of this market movement.

Unlike gold, which primarily serves as a store of value, platinum has a dual nature. It is not only an investment asset but also a critical industrial commodity with diverse applications. This uniqueness explains both the higher price potential and increased volatility. For investors, the question arises: Is platinum an attractive addition to their portfolio, and what use cases justify its current valuation?

The Use of Platinum in Industry and Future Technologies

Historically, platinum was the most valuable precious metal for a long time. Since the patenting of the Ostwald process in 1902, it has played a key role in chemistry and later in the automotive industry. But today, platinum’s significance extends far beyond traditional applications.

Automotive industry as the backbone of platinum demand: The classic use is in diesel catalysts and gasoline engines. This accounted for about 40% of platinum demand for a long time. As diesel vehicle production declined, this share decreased but is partially stabilized by new engine technologies. The World Platinum Investment Council (WPIC) forecasts about 2,915 ounces of automotive demand in 2026, down 3%.

Hydrogen economy as a growth driver: Use in fuel cells and electrolyzers for green hydrogen is the key future perspective. WPIC estimates that by 2030, an additional demand of 875,000 to 900,000 ounces could arise from these technologies. Despite delays in hydrogen infrastructure expansion, this application will be a significant demand driver in the medium term.

Industrial and medical applications: Beyond mobility, platinum is used in glass catalytic processes, dentistry, surgical implants, and the chemical industry. Glass production is expected to grow in 2026, potentially offsetting moderate declines in other segments. Use in laboratory technology and scientific instruments remains stable.

This diversity of applications fundamentally differentiates platinum from gold and explains why, despite its rarity, it was historically cheaper than gold. The combination of industrial demand and investment interest creates a complex market dynamic.

Price Development and Market Structure: From Stagnation to Rally

The contrast between gold and platinum is clear in their ten-year performance. Gold rose from about $1,125 (February 2016) to nearly $4,850 (February 2026), a 331% increase, while platinum prices remained stagnant for a long time. Only from June 2025 did the movement accelerate.

Reasons for this recent rally include:

Structural supply shortages: South Africa produces about 70-80% of global platinum. Mine production there fell 5% in 2025, reaching the lowest level in five years. A structural deficit of approximately 692,000 ounces in 2025 led to extreme physical scarcity, evident in high lease rates and backwardation in the London OTC market.

Geopolitical tensions and dollar weakness: Trade conflicts, US tariffs, and tensions between the US and Iran increased safe-haven flows into commodities. A weaker US dollar made USD-denominated platinum more attractive to international buyers.

Gold spillover effect: After gold’s extreme rally, investors sought cheaper precious metals. Platinum, as a rare and promising alternative, benefited massively from this effect.

ETF inflows and investment demand: Investments in platinum bars and coins increased by 47% in 2025. This institutional money inflow, combined with low market liquidity (only about 73,500 NYMEX contracts outstanding), significantly amplified price movements.

In early 2026, after reaching a high of $2,925 (January 26, 2026), prices corrected sharply by over 35% to $1,882 within six trading days. This volatility underscores the illiquidity of the platinum market. In comparison, the gold market has an open interest of over $200 billion.

Market Outlook 2026 and Beyond

WPIC forecasts for 2026 show a nuanced picture. After the deficit year 2025, a nearly balanced market with a slight surplus of about 20,000 ounces is expected in 2026. Total supply is projected to increase by about 4% to 7,404 koz, with mine production up 2% to 5,622 koz. Recycling supply could rise by around 10%, as higher prices encourage scrap from end-of-life catalysts and jewelry.

Demand is forecasted to decline by 6% in 2026, mainly due to a 52% drop in investment demand. WPIC expects that easing trade tensions and the reduction of CME stockpiles could lead to net outflows. ETF investors might realize profits at current prices.

However, it is critical to note that WPIC expects platinum deficits to return after 2026, lasting until at least 2029. Above-ground stocks could shrink significantly by the end of the decade, providing long-term price support despite potential volatility in 2026.

Analyst opinions vary widely:

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

This range highlights current market uncertainty.

Investment Strategies and Risk Approaches

Different investor types have various ways to access platinum:

For active traders: The volatility offers trading opportunities. A proven strategy is trend following with moving averages (fast MA of 10 periods, slow MA of 30). A buy signal occurs when the fast MA crosses above the slow MA from below — ideally with about 5x leverage. The position is closed when the fast MA crosses below the slow MA.

Risk management is essential: risking no more than 1-2% of total capital per trade. For example, with €10,000 total capital and a 1% risk (€100), using a 5x leverage and a stop-loss at 2% below entry, the maximum leveraged position would be €1,000. However, due to market illiquidity, slippage and gap risks must be considered.

Suitable instruments include CFDs, futures, and options. CFD trading allows participation with smaller capital and leverage. Platforms like Mitrade offer transparency and user-friendly interfaces for such speculation.

For conservative investors: Including platinum in a portfolio can be sensible, as it has its own supply-demand dynamics and sometimes moves counter to equities. This offers diversification benefits, especially as a hedge for US stock portfolios. Suitable formats are platinum ETFs/ETCs, physical platinum, or platinum mining stocks.

The portfolio allocation should be tailored individually but should consider platinum’s higher volatility. Combining with other precious metals and regular rebalancing is recommended.

Platinum vs. Gold: What Are the Differences?

Gold remains the anchor precious metal for inflation protection and wealth preservation. Its liquidity is exponentially higher, and volatility is significantly lower. Platinum, on the other hand, is rarer but has a dual role: partly as a consumable industrial metal and partly as a store of value.

This duality is a double-edged sword. During economic upswings, platinum could benefit disproportionately from rising industrial demand. During recessions, demand could collapse faster than for gold. The platinum-gold ratio has been below 1 since 2011 (platinum cheaper than gold), which was unusual given platinum’s rarity. Since the 2025 rally, this ratio has only marginally improved: early 2026, gold still trades about $2,700 higher per ounce than platinum.

This historical undervaluation was partly due to weakness in the automotive industry and diesel decline. With the rise of fuel cell technology and the hydrogen economy, this could change. Future technological applications might revalue platinum long-term.

Frequently Asked Questions

Should I invest in platinum instead of gold?

Both precious metals have advantages. Gold is more stable and inflation-protected. Platinum offers potentially higher long-term appreciation due to its use in future technologies. 2025 proved this: platinum gained over 100% and temporarily outperformed gold. However, previous years showed platinum often lagged gold’s performance, with higher volatility and risks. A diversification approach—adding platinum rather than replacing gold—is often wiser.

How can I invest via derivatives in platinum?

Futures and options allow speculation on future prices. These instruments are complex and carry high risks and rewards. CFDs are more accessible for beginners, as they require smaller capital and offer leverage. Information platforms can help navigate these markets.

What price trends do experts expect for platinum in the coming years?

WPIC forecasts that after a balanced market in 2026, deficits will reemerge until at least 2029. Increasing use in hydrogen and fuel cells could require an additional 875,000 to 900,000 ounces by 2030. Some analysts see platinum as structurally undervalued; others expect significant declines in 2026. High volatility and market illiquidity demand cautious investment decisions and strict risk management.