What is platinum? Why did the price break through $1,978 to reach a 17-year high?

Supply Challenges of Rare Precious Metals

What is platinum? This question may still be unfamiliar to many investors. As a rare precious metal, over 70% of the global supply of platinum comes from South Africa, which has faced multiple challenges in recent years, including mine aging, power crises, and extreme weather conditions. These difficulties have directly led to tightness in the spot market—recently, the one-month leasing rate for platinum soared to a historic high of 14.12%, fully reflecting how severe the shortage of physical supply is in the market.

Edward Sterck, Research Director at the World Platinum Investment Council, pointed out that supply shortages will become the norm in the coming years. It is forecasted that the supply gap, which has been ongoing since 2025, will continue until 2029, undoubtedly providing strong fundamental support for platinum prices.

Capital Flows Behind Six Consecutive Rises

On December 18, platinum prices surged to $1978 per ounce, rising for six consecutive days and reaching the highest level since 2008. Since 2025, the cumulative increase has approached 120%, far surpassing gold’s performance. The underlying logic behind this warrants in-depth consideration.

After the Federal Reserve’s rate cut policy was implemented, investors began adjusting their precious metals allocations. Since gold has already reached a historic high, some funds have gradually shifted toward platinum and palladium, which are relatively undervalued and more volatile. This reallocation of capital is creating a clear spillover effect, driving the rapid rise of platinum prices, which have already outperformed gold and silver.

Expectations for the 2026 Target Price

FXEmpire analyst Muhammad Umair believes that platinum has entered a new upward cycle. In addition to structural supply shortages and rising industrial demand, a weakening US dollar, dovish Federal Reserve policies, and a declining platinum-to-gold ratio will continue to support platinum prices.

Based on these factors, analysts forecast that platinum will reach a target range of $2170 to $2300 in 2026, indicating over 10% upside potential from current levels. Deutsche Bank also shares a similar view, expecting platinum investment demand to recover to 500,000 ounces in 2026, with a supply-demand deficit accounting for 13% of total supply. Gold, silver, and other platinum group metals are expected to follow suit and rise accordingly.

Behind this wave of market movement are the combined effects of supply constraints, capital reallocation, and policy environment resonance.