Platinum Extends Surge To Highest Since 2021 As Market Tightens

Platinum extended its surge as the market for the precious metal strains under signs of severe tightness.

Spot prices jumped as much as 4.6%, following last week’s 10% increase, to trade around $1,200 an ounce, the highest level since May 2021. The implied cost of borrowing the precious metal for one month peaked in data going back six years, while holdings in platinum-backed exchange-traded funds reached a 10-month high. 

The bullish signals come as the market heads for another year of deficit. A dramatic outflow of platinum to the US in the first few months of 2025 — over fears that imports would be subject to President Donald Trump’s tariffs — also pushed up the cost of borrowing the metal.

While the platinum that flooded into New York Mercantile Exchange warehouses is now emptying back out, lease rates reflecting the return that holders in London and Zurich vaults can get by loaning their metal out on a short-term basis have remained stubbornly high. Normally, the returns sit close to zero, but this year they’ve surged to historic levels, with one-month lease rates exceeding 13.5% on an annualized basis. 

“There’s been growing tightness since December,” said Ed Sterck, director of research at the World Platinum Investment Council. “The outflows from NYMEX should soften that, but fundamentally the market is still headed for a deficit.”

The WPIC estimates a supply deficit of almost 1 million ounces this year. The metal is used in catalytic converters and laboratory equipment, in addition to investment demand. Prices are now up 32% this year, outstripping gold’s 26% gain. 

Unusually for a precious metal, spot prices for platinum are also trading well above futures, another sign of tightness. 

Spot platinum rose 3.0% to $1,203.44 an ounce as of 1:23 p.m. in London. The Bloomberg Dollar Spot Index edged 0.1% lower. Gold, silver and palladium also rose.