Platinum market tightens even as discount to gold persists

The platinum market is facing a significant supply shortage that commodity traders should watch closely. According to the World Platinum Investment Council (WPIC), the structural deficit for the precious metal was estimated at 995,000 ounces in 2024; that is projected to shrink only slightly to 850,000 ounces in 2025.

The metal is perhaps best known for its application in the automotive industry: catalytic converters use platinum to reduce harmful vehicle emissions. As our chart shows, this remains the biggest source of demand, followed by other industrial sectors and the jewelry business. Total demand is projected to stay relatively stable this year.

On the supply side, however, the WPIC is warning of lower output from South African mines and weaker supply from the recycling market. Supply has been steadily shrinking since 2021.

Looking forward, US tariffs on imported cars could have a knock-on effect on platinum demand, while the rise of electric vehicles mean a likely long-term structural hit to automotive use more broadly.

Meanwhile, jewelry demand has been trending modestly higher, supported by platinum's valuation discount to gold in recent years, as shown in the second chart -- making it an increasingly attractive alternative to "white gold."

Gold surpassed platinum in price about a decade ago, and as global central banks accumulate bullion, the gap has grown ever wider. This is a remarkable reversal from previous decades.

Platinum's greater range of industrial uses versus gold arguably drove the rare metal to prominence in popular culture in the 1970s; as prices skyrocketed, so did perceived marketing prestige. (American Express launched its first "Platinum Card" in 1984, with privileges exceeding those of the gold card.)