Platinum Prices Show Signs of Recovery

The price of the precious metal platinum is rising. Previously, the market had been sluggish due to slowing demand for industrial applications. Compared to fellow precious metal gold, its significantly lower valuation has attracted attention as an asset allocation, attracting buyers. Sales of platinum bars to individuals at precious metals stores in Japan have increased sevenfold. China also purchased 20% of the world’s annual production from April to June.

In Okachimachi, Tokyo, a hub for precious metals wholesale and retail stores, platinum prices were advertised at 6,846 yen (approximately 333.3 yuan) per gram on the streets, still scorching hot after the Obon Festival. While prices were about 30% lower in yen at the beginning of the year, they have suddenly begun to rise since May.

A female clerk at a jewelry store said, “We’re seeing an increase in customers buying platinum, anticipating further price increases.” A popular item is the “kihei” necklace, which is said to be a jewelry item that retains its value more easily.

Platinum bars are also selling like hotcakes at the stores of Tanaka Precious Metals Industry, Japan’s largest gold retailer. While sales figures haven’t been released, they reportedly increased sevenfold in July compared to January, when prices were relatively low. Fumiko Takahira, general manager of the company’s precious metals retail department, stated, “We’ve seen a long-awaited surge in platinum.”

The surge in platinum buying stems from its undervalued value. Amidst the de-dollarization trend, gold hit its first all-time high of $3,500 per ounce in April and has since fluctuated sideways within this high price range. Meanwhile, investors are turning to platinum as an undervalued asset, fueling its rally.

On August 19, New York futures (the main contract), the international benchmark for platinum prices, rose to $1,360 per ounce. This represents a 50% increase from the end of 2024. This increase far outstrips the 30% increase in gold and the 10% increase in the S&P 500.

Platinum prices have fallen from their recent highs due to the US government’s July 30th announcement that refined copper (copper ingots) would be exempt from tariffs. However, Yuichi Ikemizu, representative director of the Japan Precious Metals Market Association, stated that “the strong price trend remains prominent.”

Chinese consumers are supporting platinum prices. Ikemizu visited Shenzhen, a major hub for precious metals trading in China, in mid-July and reported that “platinum trading is showing signs of activity.” Jewelry store counters show larger platinum counters than gold counters, filled with platinum bars and necklaces.

In China, while consumers have historically shown less interest in platinum than gold, platinum jewelry is gaining popularity, particularly among young people.

Rhona O’Connell, head of market research at StoneX, analyzed that as gold prices rose this spring, “Chinese jewelers increased their dip buying.” China’s platinum imports exceeded 10 tons per month from April to June, and the inflow during these three months is equivalent to approximately 20% of platinum production in 2024.

Platinum production in 2024 will be 180 tons. This represents only one-twentieth the value of gold, making it extremely scarce. To use a credit card as an example, a “Platinum” card now has a higher tier than a “Gold” card and carries a higher annual fee.

However, unlike gold, which is primarily used for investment, approximately 70% of platinum demand is for industrial purposes. It is mostly used as a catalyst to purify vehicle exhaust. The revelation of Volkswagen’s (VW) emissions cheating scandal in 2015 triggered a decline in the price of platinum. Since then, the relative value of platinum and gold has reversed. By April 2025, before platinum’s market began to rise, platinum had fallen to less than one-third of gold’s value.

Currently, gold prices remain sideways within their historically high range, lacking upward momentum. The potential for platinum’s relatively undervalued price to rise has attracted investors, and the price gap between the two is gradually narrowing.

Meanwhile, South Africa, the largest platinum producer, saw reduced production from April to June due to floods earlier this year. Wilma Swarts, director of platinum group metals (PGMs) at Metals Focus, a UK-based precious metals consultancy, stated, “The impact is likely to continue into July to September.”

Financial institutions have also raised their expectations for platinum prices. Swiss gold refiner MKSPAMP predicts a rise to $1,600 in the second half of 2025, a new high for the year. HSBC also raised its 2025 average annual price forecast from $1,030 to $1,215 in late July. The average price is expected to reach $1,445 in 2026.