Platinum’s price has jumped over 80% this year, marking its biggest annual increase in 38 years. It peaked in October at more than $1,730 per troy ounce, approaching levels not seen since February 2013. This surge is mainly due to its low price compared to Gold and a tight supply situation. Earlier this year, Platinum’s price lagged significantly behind Gold, with the price ratio hitting nearly 3.6 in April. This meant Gold was over three times as expensive as Platinum, attracting more buyers to the cheaper option. The Gold/Platinum ratio has now stabilized around 2.5, with a price difference of over $2,500 per troy ounce—much higher than at the start of the year, though Platinum still trails behind Gold overall.

Supply and Demand Dynamics

For the third consecutive year, the Platinum market is expected to have a supply shortage. The World Platinum Investment Council predicts a smaller supply deficit than originally thought. Next year might even see a slight supply surplus, with demand expected to drop by 5.6% and supply increasing by just under 4%. Platinum’s potential for further price increases seems limited. The market is predicted to be less constrained, and Gold’s price influence may decrease. Ongoing supply deficits have cut down inventories significantly, with a stock-to-use ratio over 40%. Prices might align more closely with Gold, reaching $1,800 per troy ounce by 2026, resulting in a 2.4 price ratio. After a powerful rally, Platinum has surged over 80% in 2025 and is now nearing the year’s high of about $1,730 per troy ounce. This marks the highest price since February 2013, signaling a crucial moment in the market. Although momentum is strong, fundamental changes might indicate a shift in direction is possible. The primary reasons behind this year’s price increase include Platinum’s significant discount to Gold and a major supply shortfall. However, the outlook for 2026 suggests a shift to a market surplus for the first time in three years, as demand is expected to decrease. This might mean the strong forces that drove prices up are beginning to fade.

Market Strategies and Outlook

As of late November 2025, recent market data shows that speculative net-long positions in the futures market have stopped rising. This could mean that bullish confidence is declining. Additionally, significant platinum-backed ETFs, like the Aberdeen Standard Physical Platinum Shares ETF (PPLT), have experienced small outflows in the past two weeks. This indicates that some early investors are cashing in their profits near these high levels. For those trading derivatives, the high implied volatility from this year’s sharp price surge makes selling options appealing. Traders who think the rally has peaked could consider selling out-of-the-money call options or using bear call spreads. These strategies would benefit if Platinum’s price stabilizes or declines from its current highs soon. The Gold/Platinum ratio, which fueled the rally when it reached 3.6 earlier in 2025, is now stable around 2.5. It is unlikely to drive further price increases for Platinum in the short term. Traders should monitor this ratio for stability, as a significant movement in either Gold or Platinum could indicate the next market direction. With forecasts shifting from a supply deficit to a surplus, the potential for further price increases seems limited. While low inventories may provide a price floor and prevent a crash, chasing the rally at current levels carries risks. We should prepare for a period of consolidation, utilizing derivative strategies to guard against possible declines from these multi-year highs. Create your live VT Markets account and start trading now.

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