Platinum, The Dark Horse Outshines Gold In 2025 — Here's What’s Fueling The Rally

Platinum has quietly emerged as one of the standout performer in the commodities market, earning its tag as the dark horse of 2025. Long overshadowed by gold and silver, the metal has delivered a sharp rally that has caught investors and industrial users by surprise.

Platinum prices are currently hovering around $2,182 per ounce, marking a dramatic upswing. The metal is up nearly 140% year-to-date and has gained about 48% over the past three months, making it one of the best-performing precious metals in recent times. This surge has far outpaced traditional safe-haven assets and reflects a powerful mix of structural and cyclical drivers.

Severe supply deficits are at the core of platinum’s strength. The metal is on track for a third consecutive annual deficit, driven largely by supply disruptions in South Africa, the world’s largest producer. Persistent operational challenges and constrained output have kept global inventories tight.

Strong investment demand has added further momentum. Against an already constrained supply backdrop, platinum has benefited from a broader wave of investment flows into precious metals in 2025. This rush has also helped silver double in price and surge to record levels, with platinum increasingly seen as a relative value play.

Industrial demand and substitution trends are also supportive. Platinum is widely used across the auto, jewellery and industrial sectors, including chemicals, glass and laboratory equipment.

Historically, high borrowing costs have encouraged industrial users to lease platinum rather than buy it outright. However, with borrowing costs for the metal surging, this dynamic may be shifting.

Macroeconomic factors and trade dynamics have also played a role. The London market has shown signs of tightening as banks park platinum in the US to insure against potential tariff risks.

At the same time, exports to China have remained robust. Optimism around Chinese demand has been reinforced by the launch of platinum futures trading on the Guangzhou Futures Exchange, which is expected to deepen market participation.

Investor and ETF inflows have reinforced the rally, as portfolio managers seek diversification beyond gold and silver. With platinum historically trading at a discount to gold, the sharp re-rating reflects changing perceptions around scarcity and demand resilience.

For years, the transition to electric vehicles weighed on platinum and its sister metal palladium, both key inputs in catalytic converters for internal combustion engines.

However, slower-than-expected EV adoption in several markets has improved sentiment. Adding to this, the European Union recently eased requirements that would have halted sales of new petrol and diesel cars from 2035, providing renewed support to demand expectations.

The rally in platinum mirrors the broader outperformance seen across precious metals, particularly when compared with equities.

Nifty 50, India’s benchmark equity index, is up a modest 10.69% year-to-date, trading near 26,172 compared to about 23,700 at the start of the year. Respectable, steady, but lacklustre when stacked against what’s been unfolding in commodities. Platinum has surged 140%, silver is up 132%, and gold has rallied nearly 70%.