Platinum beats gold, silver so far in 2025. Is it the next big investment idea?

After gold and silver, platinum is emerging as a top investment option in 2025. Platinum has raced ahead of both gold and silver so far in 2025.

Year-to-date, both Gold and silver are up by 30% and 26%, respectively. However, the Platinum steals the show. Platinum has risen by a stunning 40% since January 1.

The spike in platinum is recent. In fact, the big surge in Platinum has come in over the last month – gold and silver are up by 7% and 13% respectively during this period, while platinum is up a staggering 30%.

So, what is fueling the bull run in platinum?

Before that, let us look at how platinum performed over the years and whether there is a pattern.

Platinum Patterns

Platinum is currently at $1,250, a four-year high last seen in April 2021. Platinum’s all-time high price was close to $2,166 recorded in April 2008. Before that, the previous peak occurred in February 1980, when the price rose by 350% – from $190 in 1978 to $900 in 1980, in just 24 months.

Two things stand out. One, in both instances, when prices hit a peak, the slide was equally fast. From the peak price of the 80s, platinum crashed 70% in just 30 months. In 2008, the crash was much more dramatic – in just 10 months, platinum prices crashed over 50%.

Secondly, over long periods, platinum prices remained in a range except for the spikes. Since January 1980, the price of platinum has fluctuated significantly, but as recently as January 2025, the price hovered around $900.

The pattern looks clear – a long period of silence and then a big spike with an equally fast downfall.

Demand-Supply

Did you say, what’s the use of platinum? One of the rarest metals in the world, platinum is mostly used in the chemical and electrical industries, petroleum refineries, and in the manufacture of automotive catalytic converters. South Africa accounts for 80% of production, followed by Russia and North America.

Ok, there are uses, but what about supply and demand that will reflect in price change?

The World Platinum Investment Council report predicts a supply deficit in the platinum market as well as a decline in demand in 2025. But, how will that impact prices if both supply and demand are falling?

The total supply is expected to reach 6,999 koz, a decline of 4% compared to 2024, while the total demand is forecast at 7,965 koz, 4% lower year-on-year. But, as the demand still exceeds supply, the upward pressure on price is expected to remain.

A case-in-point – The recent breakout in platinum price began on May 20, a day after the World Platinum Investment Council’s report was published. Thanks to the speculative and ETF demand, the platinum prices rallied recently.

But, are investors buying platinum? Yes. Globally, up to $10 billion in assets is already invested in platinum. Investor demand for platinum has been on the rise, with platinum ETFs seeing 70,000 ounces of inflows since the beginning of the year.

Gold-Platinum Ratio

There’s another factor not to be overlooked. The interplay of prices for commodities, particularly precious metals such as gold, silver, and platinum, defines how valuable one is in comparison to the other. And that is reflected in terms of a ratio.

Let us look at the gold-to-platinum ratio to see their valuation against each other. Why? Because it will tell us whether gold is expensive relative to platinum or vice versa.

Gold had a fantastic run over the last 2-3 years. This distorted the long-term average gold-to-platinum ratio, which has been in the range of 1 to 2.

In May, the gold-to-platinum ratio was close to 3.5, indicating over-stretched valuations of gold compared to platinum. Either gold had to fall, or the platinum price had to move up.

And it happened. Following the recent surge in platinum prices, the gold-to-platinum ratio now stands at 2.7. Gold, however, is still significantly more valuable than platinum.

Summing Up

The breakout in the Gold price happened 2-3 years back. Gold price today in India is Rs 99,980, up over 45% in the last one-year. The breakout in platinum has happened recently, but not all industry experts are convinced that it has legs.

Goldman Sachs predicts platinum prices will likely return to a trading range that has been observed for at least the past ten years, with a recent breakout probably being short-lived.

History shows that as and when platinum spikes, it covers a lot of ground. Understandably, the risk-reward ratio is high in the case of platinum compared to gold and silver.

Whether the breakout will be sustained or the rally will fade out soon, only time will tell.

Also Read: Gold set to cross all-time high price of $3,500 amid Middle East conflict