Platinum is making waves in 2025 with a remarkable price rally that has caught the eye of pension funds and investors alike. This surge is notable because platinum has outpaced other precious metals like gold and silver, climbing nearly 49% this year to reach its highest levels in over a decade.
Several factors are driving this rally. One major reason is the fear of supply shortages. Platinum supplies have been falling short for three consecutive years, tightening availability globally. This scarcity is compounded by geopolitical tensions, such as concerns about conflicts involving Iran and Israel, which could disrupt supply chains further. The possibility of increased U.S. involvement in these conflicts adds to market uncertainty and drives prices higher.
China plays a crucial role in platinum’s rising demand. Chinese imports have surged dramatically—by nearly half month-on-month at one point—reflecting strong industrial use and growing jewelry sales despite high prices for other precious metals like gold. In fact, while gold jewelry sales have dropped significantly due to record-high gold prices, platinum jewelry sales in China have risen sharply as buyers seek more affordable alternatives.
The automotive industry also contributes heavily to platinum’s appeal this year. For some time, electric vehicles (EVs) were expected to reduce demand for platinum since they don’t use catalytic converters where platinum is essential. However, car manufacturers are now shifting focus from pure EVs back toward hybrid vehicles that still rely on catalytic converters but require even more platinum per vehicle due to their stop-start technology and battery operation patterns.
This combination of tight supply, robust demand from China’s jewelry market, renewed interest from automakers in hybrids needing more platinum, plus geopolitical risks creating uncertainty around supply chains makes the metal especially attractive right now.
Pension funds are paying close attention because these conditions suggest not just a temporary spike but potentially sustained strength in platinum prices going forward. Unlike gold—which has seen huge gains already this year leading some investors to feel “gold fatigue”—platinum offers fresh upside potential amid its unique industrial uses and constrained availability.
In addition to physical demand factors driving up prices directly through markets like ETFs (exchange-traded funds), high leasing costs for physical metal discourage refiners from flooding the market with new supplies right now; inventories above ground remain tight too.
All these elements together create an environment where pension funds see value in adding or increasing exposure to platinum as part of their portfolios—not only as a hedge against inflation or geopolitical risk but also as an investment benefiting from structural shifts across industries worldwide that support higher long-term pricing for this versatile precious metal.