A new report shows that the price of platinum has surged by over 80% since this year began. This puts the metal on pace for its strongest annual performance since exchange trading started nearly four decades ago.
This year’s peak occurred in October at slightly above $1,730 a troy ounce and was nearly matched again at the start of this month, marking the highest level seen since 2013.
According to Carsten Fritsch, a commodity analyst at Commerzbank, the metal’s rally has been fueled by two primary drivers: increasingly tight supply-demand balance and the metal’s undervaluation relative to gold. Fritsch explains that for some time now, the metal’s price trailed behind gold.
As a result, he continues, the gold-to-platinum price ratio rose to an unprecedented 3.6 earlier this year. This indicates that 1 ounce of gold cost over 3 times as much as an ounce of platinum. This significant gap drew the attention of both investors and buyers of jewelry, who began turning to platinum as a more affordable alternative. Eventually, the ratio retreated to about 2.5, where it has remained with minimal fluctuations.
Platinum’s role extends well beyond jewelry, with significant demand coming from industrial sectors. The metal is essential for automotive catalytic converters and emerging hydrogen-energy applications, making shifts in industrial activity a major influence on price trends.
Even so, the absolute price spread remains wide, with gold going for over $2,500 an ounce. This is considerably higher than its price at the start of this year. Projections by the World Platinum Investment Council expect supply to the platinum market to remain low for a third straight year, though the deficit should be smaller than projections from 6 months earlier.
Looking ahead to 2026, the council anticipates a modest surplus as overall supply is set to rise by roughly 4% while demand is projected to fall by 5.6%. This suggests that the scope of further strong price increases is limited. Unlike the past 3 years, the market is unlikely to be as tight, and the powerful support previously provided by increasing gold prices may ease.
Depleted inventories, which were reduced sharply by recent supply shortfalls and now equal to just over 40% of annual use, may help prevent significant declines. Analysts expect platinum to largely track gold’s movements in 2026, reaching around $1,800 per troy ounce by the year’s end. This implies that the price ratio may reach 2.4.
Companies like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) that produce the metal are well positioned to benefit from the current market that is trending upwards.
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