Here’s why platinum price has soared to a 4-year high

Platinum price extended its gains on Wednesday to trade at a level last recorded in May 2021. Since early April when it was at its lowest level since November 2023, the previous metal has rallied by about 45%. At the time of writing, it was at $1,256, having rallied its way deep into the overbought territory.

While a corrective pullback is imminent, the bullish outlook remains strong. The ongoing shift from the more expensive gold, coupled with platinum’s supply concern,s are set to continue bolstering the metal’s uptrend. 

Gold rallying prompts shift to the less expensive platinum

Gold price has been on a historic rally in recent months; hitting multiple highs in April. Trump’s aggressive tariffs, geopolitical risks, and concerns over the stability of the global economy have heightened the demand for the lustrous metal and other conventional safe-haven assets. Central bank buying has also supported the uptrend.  

In late April, gold price rallied to $3,500 an ounce for the first time ever. While it has since pulled back, it is still trading steadily above the once evasive zone of $3,000. Analysts expect it to rise further in coming months with Goldman Sachs forecasting that the precious metal will end 2025 at $3,700 an ounce.

Gold price rallying has seen investors shift to a discounted option - platinum. The shift in demand is particularly high in the jewelry sector. For instance, according to the World Platinum Investment Council, sales of gold jewelry in China dropped by 32% in Q1’25 YoY while that of platinum jewelry was up by 26% during the same period. 

Read more: Is platinum becoming the cheap alternative to gold?

Supply disruptions, heightened demand shapes platinum market 

In addition to the spillover of gold rallying, platinum price is finding support in the ongoing demand/supply imbalance. The imbalance is largely due to supply disruptions, lower mine productivity, and surge in demand.

According to Metals Focus, platinum’s global production of 5.77 million ounces is still significantly below the annual average for the period between 2010 and 2021. As this market tightness persists, the World Platinum Investment Council forecasts a deficit of 966 koz, marking the third consecutive year of platinum deficit. Indeed, the forecast supply figures are the lowest since 2020 during the coronavirus-induced disruptions. 

Heightened investment and jewelry demand, especially in China, is set to sustain the current platinum price uptrend. Besides, the US-China trade agreement has eased concerns over Trump’s aggressive tariffs. Subsequently, lower bets on Fed rate cuts, and a weaker US dollar, will likely support platinum demand. This will mean the continuation of the current supply/demand imbalance and the metal’s price uptrend.

Platinum price technical analysis

Platinum price rallied to a fresh 4-year high in early Wednesday session at $1,270 before pulling back slightly to $1,225 as at the time of writing. The surge has seen it enter the overbought territory with an RSI of 83. 

With the expected corrective pullback, platinum price may enter consolidation mode, trading within a range of between Wednesday’s intraday high of $1,263 and the support zone of $1,169. Even with a further pullback, the precious metal will likely remain above the previously evasive zone of $1,100 as the asset remains on an uptrend.