Platinum has quietly soared above $1,650 per ounce, reclaiming the highs not seen since 2013. The metal's 81.5% year-to-date performance has outpaced gold and silver.

This rally makes it the best-performing precious metal in 2025.

The renewed momentum stems from both structural supply constraints and surging investor interest.

The demand is strong in China, where platinum serves as a high-quality substitute for gold in jewelry and investment.

Also Read: World's Largest Platinum Miner Debuts Into Tight Supply, Soaring Prices

China Demand

According to the World Platinum Investment Council (WPIC), Chinese demand for platinum jewelry increased by 137% year-over-year in the second quarter.

The demand for bar and coin investments moved as high as 176%. Yet despite the rally, platinum remains historically undervalued against gold.

"It still takes around 2.5 ounces of platinum to buy one ounce of gold -- a ratio well above historical averages," Commerzbank analyst Barbara Lambrecht said per Invezz.

The WPIC expects the platinum market to remain in deficit for the third consecutive year, with shortfalls averaging around 620,000 ounces annually through 2029. That number is about 8% of the global demand.

Lambrecht adds that "at current prices, 90% of production is already profitable," yet she cautions that new mine development is capital-intensive and slow-moving.

Commerzbank now forecasts platinum to hit $1,700 per ounce by the end of 2026. The bank expects a persistent deficit and robust investor flows.

Still, even the industry leaders remain puzzled by the sheer velocity of the rally.

"To be honest, I don't fully understand what's driving this price increase from a short-term fundamental perspective," Sibanye-Stillwater (NYSE:SBSW) CEO Richard Stewart told IDN earlier this month.

Sibanye-Stillwater (NYSE:SBSW), one of the world's largest producers of platinum group metals (PGMs), operates major mines in South Africa. It also runs the Stillwater in Montana -- the only large-scale platinum mine outside South Africa, Zimbabwe, and Russia.

Stewart attributed the surge more to investor activity than to real industrial growth. "We haven't seen a fundamental increase in industrial demand," he said, pointing to the lack of growth from the automotive sector.

Meanwhile, in South Africa's Limpopo province, Valterra Platinum (OTCPK: ANGPY) is taking a longer-term view. The company is pushing ahead with plans to expand the Mogalakwena mine, the world's largest open-pit PGM operation.

Mogalakwena's transition would blend the low-cost open-pit output with high-grade underground ore. In phase one, it would target 2.5 million tons of ore a year, maintaining a grade of 3g/ton.

"If we continue with the study, and beyond 2030, we envision a ramp-up to a 3.6-million- to 4.5-million-tonne-a-year operation," General Manager Stephan Nothnagel said per MinersDigest.

Price Watch: abrdn Physical Platinum Shares ETF (NYSE:PPLT) is up 75.33% year-to-date.

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