Platinum, often overshadowed by gold, is quietly building a strong case for a bull market in 2025. The key driver behind this potential surge is the persistent supply deficit. For the third consecutive year, platinum is facing a significant shortfall, with the deficit projected to reach nearly a million ounces in 2025. This imbalance is largely due to challenges in South Africa, which accounts for about 80% of the world’s platinum output. Issues such as energy crises and regulatory challenges have hindered production, leading to a decline in primary supply.
Despite these supply constraints, demand for platinum is on the rise. The automotive sector, which uses platinum in catalytic converters, continues to drive demand, although the pace has slowed somewhat due to the gradual shift towards electric vehicles. However, other sectors are picking up the slack. The jewelry market, particularly in China, is experiencing growth, and industrial applications are also increasing. Additionally, investment demand is strong, with investors drawn to platinum’s undervalued status compared to gold.
The combination of dwindling above-ground inventories and robust demand is setting the stage for a potential price surge. Historically, platinum has been priced at a premium to gold, but currently, it trades at a discount. This undervaluation, coupled with its diverse and growing demand drivers, presents an attractive opportunity for investors. As the supply deficit continues to erode existing stockpiles, the market may reach a tipping point where prices could rise significantly to balance supply and demand.
Platinum’s role in emerging technologies, such as hydrogen fuel cells, adds another layer of demand potential. As the world transitions towards cleaner energy solutions, platinum’s critical role in these technologies could further boost its appeal. With its strong fundamentals and growing demand across multiple sectors, platinum is poised to break out of its price stagnation and potentially enter a bull market in 2025.