2025 Platinum Investment Guide: Can this market trend make money like gold?

Platinum’s Surprising Performance in 2025

Since the beginning of the year, the precious metals market has remained hot. Gold has stabilized at $3,300 per ounce, but platinum has been quietly staging a “comeback.” From $900 in January to $1,450 in July, an increase of over 50%—such performance has led many investors to reevaluate whether buying platinum is a good deal.

In comparison, gold hit a record high of $3,500 in April, but this was part of a long-term upward trend. The rapid rebound in platinum is particularly noteworthy, driven by factors including: South African supply crisis, structural shortages, extreme physical scarcity (reflected in high lease rates), geopolitical tensions, stable demand from China and other regions, a weakening dollar, and significant inflows into ETFs.

Platinum vs. Gold: Why Has Platinum Been “Neglected” Long-Term?

The answer lies in supply and demand. Although platinum is far rarer than gold, its price performance has lagged in recent years. A key reason: weakness in the automotive industry.

Platinum’s main use is in diesel catalytic converters, and the decline in global diesel vehicle demand has directly impacted platinum demand. This situation only began to change around 2025. Data shows that global platinum demand in 2025 is expected to be 7,863 thousand ounces, while supply is only 7,324 thousand ounces, resulting in a deficit of 539 thousand ounces. This supply gap is the core driver behind platinum’s price rebound.

Demand composition: 41% from the automotive industry (3,245 thousand ounces), 28% from industrial use (2,216 thousand ounces), 25% from jewelry (1,983 thousand ounces), and 6% from investment (420 thousand ounces). Notably, industrial demand is expected to decline by 9%, but this creates investment opportunities—if industrial demand unexpectedly rebounds (especially if China and the US industrial growth exceeds expectations), platinum prices could surge significantly.

The Investment Journey of Platinum: From Obscurity to Renewed Attention

Understanding platinum’s history is crucial for assessing its investment value. In the 19th century, platinum first entered circulation as a precious metal, but it wasn’t until the 20th century that it found its true use. In 1902, the Ostwald process was patented—this technology enabled large-scale production of nitric acid, with platinum playing a key role. Later, applications in the automotive industry caused platinum’s value to skyrocket, reaching up to six times the price of gold in 1924.

In March 2008, platinum hit a record high of $2,273 per ounce during the financial crisis. This surge reflected two factors: risk aversion driving safe-haven demand, and limited supply due to economic recession affecting industrial consumption. Over the following decade, platinum prices oscillated around $1,000 until 2025, when they regained vitality.

Is Now a Good Time to Invest in Platinum? Comparing Three Investment Methods

Physical Purchase

Buying platinum coins, bars, or jewelry directly is the most straightforward approach, available through precious metals dealers, banks, or online platforms. However, this method involves considerations like secure storage, high transaction costs, and custody fees, making it less suitable for small investors.

ETFs and ETCs

For investors who prefer not to hold physical metal, platinum ETFs or ETCs are more convenient. These financial instruments track platinum price movements and can be directly incorporated into investment portfolios. Compared to physical assets, they have lower entry barriers and higher liquidity, especially suitable for beginners.

Derivative Trading

For experienced traders, more options are available:

• Futures and Options: high risk, high reward, requiring professional knowledge
• Platinum CFDs: lower entry barriers than futures, leverage allows small capital to control large positions, but risks are also present

Platinum CFD Trading Strategies: How to Use Leverage to Make Money

CFDs (Contracts for Difference) are popular among active traders due to their flexibility. They require only a small amount of capital to participate, with leverage amplifying both gains and losses.

A simple trend-following strategy:

Use the 10-day and 30-day moving averages. When the fast line crosses above the slow line, generate a buy signal; when it crosses below, generate a sell signal. For example, open a position with 5x leverage and close when the signal reverses.

Risk management is key:

Set a maximum risk per trade at 1-2% of total capital. For example, with €10,000 total capital, the risk per trade is €100. If platinum drops by 2%, a 5x leverage would cause a 10% loss on the position, so the maximum position size should be €1,000.

Always set stop-loss orders, such as 2% below the entry price. Once triggered, automatically close the position to limit losses.

Conservative Investors’ Choice: Using Platinum as a Portfolio Hedge

Risk-averse investors can allocate platinum as part of their existing portfolio. Since platinum has independent supply and demand dynamics, it sometimes moves inversely to assets like stocks, providing a hedge under certain conditions.

Allocation proportions vary, but note that platinum’s high volatility can increase overall portfolio risk. It’s advisable to diversify with other precious metals and rebalance periodically to maintain target allocations.

Outlook for Platinum in 2025: Risks and Opportunities

From a supply and demand perspective, platinum shows a neutral to slightly positive outlook. On one hand, production capacity is constrained (a short-term bottleneck); on the other, demand remains relatively stable. This suggests platinum prices may stay steady or rise modestly in 2025.

However, the recent 50% increase includes genuine supply shortages as well as speculative trading. Large profit-taking could trigger corrections. Additionally, factors such as the dollar exchange rate, US tariffs, and lease rate changes are important to monitor.

Optimistic scenario: If China and US industrial growth exceeds expectations, the projected 9% decline in industrial demand could reverse, providing upward momentum for platinum prices.

Pessimistic scenario: If trade tensions escalate, suppressing industrial demand, or if commodities broadly decline, platinum will also face downward pressure.

Investment Decisions: Is It Right for You?

Active traders: The high volatility of platinum offers abundant trading opportunities. Derivatives like CFDs and futures are worth exploring, provided you have strong risk management skills.

Long-term investors: Small allocations of platinum as part of a diversified portfolio are reasonable. ETFs or physical purchases are options, but risk control is essential, and overexposure should be avoided.

Final reminder before investing: Every investor has different risk tolerance and goals. Regardless of the method chosen, understanding your investment horizon, capital, and risk limits is fundamental. Whether buying platinum is worthwhile ultimately depends on your personal situation and market judgment.