The prices of gold and silver are continuously increasing. The rising prices of gold ahead of the festive season have worried people and it is gradually becoming out of reach of the common man. Meanwhile, platinum has also joined the race to compete with gold and silver. Its price is also continuously increasing.
Almost 70% price increase
Platinum prices have increased by nearly 70% this year. Gold has increased by 51% and silver by 58%. However, it is worth noting that despite the rise in platinum prices, they are still down 28% from their May 2008 high of $2250 an ounce. Platinum prices will decline by up to 8% each year in 2023 and 2024, while 2022 sees a modest increase of 10%.
Why are prices rising?
This surge in platinum prices is due to lack of supply and increase in demand. Apart from jewellery, it is also used in industries like auto sector, petrochemicals and hydrogen energy. This is the reason why both its future prices and demand are increasing. Ritesh Jain, Founder, Pinetree Macro, told Moneycontrol, “Platinum is now at par with gold. Till some time back, platinum was even more expensive than gold. Now gold is almost three times more expensive than platinum. People are using platinum in place of gold in jewellery. Moreover, the supply of platinum from mines is not increasing, leading to its shortage.
Prices may increase further
According to the World Platinum Investment Council, there remains a persistent shortage in the platinum market. It is expected to decrease by 8,50,000 ounces in 2025. This is the third consecutive year of supply shortage, putting the market under pressure. Demand is increasing as compared to supply. More than 70% of it is used in green technology or catalytic converters in vehicles.
Quoting Kavita More, commodity research analyst at Choice Broking, Money Control said that demand for platinum will remain strong in 2025 and beyond. A supply reduction of 500,000 ounces is expected to reduce platinum production by 850,000 ounces per year. South Africa is home to the largest reserves of platinum in the world, but production has declined drastically due to bad weather, technical problems and supply chain disruptions.