What is platinum? Why is this precious metal sparking an investment craze

Platinum, a rare precious metal, has recently become a market focus. On December 18, its price broke through $1978 per ounce, continuing a six-day upward trend, reaching a new high not seen since 2008. Since the beginning of 2025, platinum has increased by nearly 120%, far outpacing gold performance.

Structural Supply Crisis Boosts Prices

Over 70% of global platinum production comes from South Africa, which is currently facing multiple challenges such as aging mines, electricity shortages, and extreme weather, directly impacting supply. The tightness in the spot market is evident from a number—recently, the one-month leasing rate for platinum rose to 14.12%.

Edward Sterck, Research Director at the World Platinum Investment Council, offers a more severe assessment: the global platinum market will face a supply gap for the third consecutive year, and this shortage could persist until 2029. Supply-side pressure has become a core factor driving prices.

Monetary Policy Favorable, Capital Reallocation

After the Federal Reserve cut interest rates, the entire precious metals sector experienced a collective rise. Interestingly, platinum and palladium prices increased far more than gold and silver. Analysts believe this reflects some capital shifting from historically high gold prices to the relatively undervalued and more volatile platinum market, indicating a clear change in capital flow.

Analysts Optimistic About 2026 Outlook

According to FXEmpire analyst Muhammad Umair, platinum has entered a new bull cycle. The upward momentum is driven by three main factors: structural supply shortages, rising industrial demand, and capital withdrawal from overvalued assets. On a macro level, a weakening US dollar, dovish Fed stance, and declining gold-to-platinum ratio all provide strong support for platinum prices.

Muhammad Umair predicts that platinum will reach a target range of $2170 to $2300 in 2026, implying more than 10% upside from current levels. Deutsche Bank also remains optimistic about platinum in 2026, expecting investment demand to rebound to 500,000 ounces, with a supply-demand deficit accounting for 13% of supply, similar to the past two years. Deutsche Bank further notes that as gold continues to rise in 2026, silver and platinum group metals will follow suit in a synchronized rally.