Platinum prices have surged to their highest level in two years, driven by a sharp increase in Chinese imports, renewed investment interest, and persistent concerns over global supply constraints. On Friday, spot platinum reached $1,096.40 USD per ounce, equivalent to approximately $1,717.38 AUD per ounce , marking a 20% gain so far this year.
The rally is fueled by rising physical demand in China and growing investor appetite for the metal, which remains comparatively undervalued next to gold. Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted, “The fundamental support stems from the prospect of a third consecutive annual supply deficit, alongside reports of increased demand for bars, coins, and jewellery in China as investors look for alternatives to high-priced gold.”
A key catalyst came earlier this week when platinum broke above the psychologically significant $1,000 USD level, triggering a wave of speculative buying. “China was a strong buyer when prices hovered around $950/oz. However, the sharp move above $1,000 is likely to dampen physical demand at these levels,” commented one trader.
According to Chinese customs data, platinum imports in April soared to 10 metric tons — the highest in a year and a 47% increase from March — underlining robust demand in the world’s largest consumer market.
With gold recently hitting an all-time high of $3,500.05 USD per ounce, equivalent to approximately $5,168.41 AUD , amid inflation concerns, central bank purchases, and geopolitical tensions, investors are increasingly turning their attention to platinum as a more affordable alternative. This shift is contributing to platinum’s momentum, especially in China, where jewellery demand is showing signs of revival after years of decline, according to the World Platinum Investment Council (WPIC).
Supply-side concerns are also playing a role. Margins for PGM (platinum group metals) producers have been squeezed by the ongoing transition to electric vehicles, which use less platinum compared to traditional combustion engines. Despite these pressures, platinum continues to play a crucial role in catalytic converters, helping reduce vehicle emissions — a key factor underpinning long-term demand.
However, some analysts caution that large above-ground stockpiles, equivalent to around 14 months of demand, may cap further price increases. Metals consultancy Metals Focus notes that these inventories could absorb short-term deficits and limit gains, especially as auto-sector consumption remains under pressure.
Meanwhile, platinum’s sister metal, palladium, saw a brief rally to $1,042.70 USD earlier in the week — a six-month high — before slipping below the $1,000 mark again on Friday. Its recent boost was attributed to Honda’s strategic shift towards hybrid vehicles, which rely more on PGMs compared to fully electric models, according to independent trader Tai Wong.
As market dynamics evolve, many analysts see the potential for a broader bull cycle in the platinum group metals, especially if demand from industrial and investment sectors continues to gain traction.
