Platinum Prices Surge 5% Amid Supply Concerns and Industrial Demand

Spot platinum prices rallied sharply on Thursday, climbing 5% to 1,200-$1,280 that had persisted for nearly three months.

Key Drivers

Supply-Side Factors

• Major producer South Africa reported 18% year-over-year production decline in Q4
• Russian export concerns resurface amid new sanctions discussions
• Global platinum market deficit forecast to widen to 1.2M ounces in 2024 (WPIC data)

Demand Fundamentals

• Automotive sector demand rises as automakers increase platinum substitution for palladium
• Chinese industrial activity shows unexpected expansion (March PMI: 51.1)
• ETF holdings increase by 85,000 ounces in March – first monthly inflow since 2021

Market Context

The platinum rally outpaced other precious metals:

• Gold +0.8% at $2,235/oz
• Silver +2.1% at $24.88/oz
• Palladium -1.2% at $1,015/oz (substitution effect)

Technical analysts note platinum’s break above $with$1,350 representing the next key test. The gold-platinum ratio narrowed to 1.68, down from 1.75 earlier this week, though still above the 10-year average of 1.45.

Market participants will monitor Friday’s U.S. jobs report for confirmation of economic strength that could support continued industrial demand, while any escalation in South African power shortages could exacerbate already constrained supply conditions.

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