Platinum vs. Gold 2025: Which precious metal offers better opportunities?

Current Market Momentum: Why Platinum Suddenly Becomes Interesting

The precious metals markets are experiencing a reevaluation in 2025. While Gold continues to trade above $3,300 per ounce and reached a new record high of $3,500 in April, Platinum is currently making a remarkable comeback. From nearly $900 in January 2025, the platinum price has risen to about $1,450 per ounce by July — an increase of over 50% in just six months. This upward momentum signals a trend reversal that has surprised many investors.

For a long time, platinum was considered the underestimated sibling of gold and silver. However, current market dynamics suggest this could change. The reason lies in a perfect combination of structural factors putting pressure on the platinum market while simultaneously boosting demand.

The Historical Perspective: From Tsarist Times to Modernity

Platinum has a fascinating history as an investment. Unlike gold, which has been minted since the 6th century, platinum only entered circulation in the 19th century. The first state-issued platinum coin was created in Russia — for a long time, the only way for European investors to acquire physical platinum.

A turning point came in 1845: the Tsarist regime banned both exports and, shortly thereafter, coinage. The resulting oversupply led to a price decline, from which platinum only recovered decades later. In the 20th century, there was a renaissance: monarchies worldwide discovered platinum for their jewelry collections because its matte surface perfectly highlights the brilliance of diamonds.

The industrial revolution then used platinum for telegraph contacts and filament wires. The turning point came in 1902 with the patenting of the Ostwald process — laying the foundation for its use in the automotive industry. By 1924, platinum reached six times the gold price. Only after 2000 did a new upward trend begin, culminating in March 2008 with a peak of $2,273 per ounce.

The Crisis of Recent Years: Why Platinum Fell Behind Gold

Since 2011, the platinum-to-gold ratio has been negative — the longest such phase in market history. The reason is simple: the automotive industry, the largest consumer of platinum through diesel catalysts, weakened significantly. Demand for diesel vehicles declined, and with it, platinum demand.

Gold, on the other hand, benefited from its role as an inflation hedge and fled to safe havens during crises. While gold prices climbed from all-time high to all-time high since 2019, platinum hovered around $1,000. The price ratio continuously worsened against platinum — a source of frustration for long-term platinum investors.

The Trend Reversal in 2025: A Perfect Storm of Multiple Factors

The rapid price increase since the beginning of the year is based on a combination of several factors:

Supply Problems: South Africa and other producing countries face structural bottlenecks that are not quickly resolvable. Production capacities remain constrained, with only about 1% expected to increase.

Structural Deficit: For 2025, total demand is projected at 7,863 kilounzen against an offer of only 7,324 kilounzen — a deficit of 539 kilounzen. This physical scarcity is also reflected in higher lease rates.

Weak US Dollar: A lower dollar makes commodities more attractive to international buyers and supports prices.

Geopolitical Tensions: Market uncertainties lead to shifts into safe havens, including precious metals.

Surprisingly Stable Demand: Especially the jewelry sector and demand from China show stability, while industrial demand declines only moderately.

ETF Inflows: Significant growth in investment products adds to demand.

The Demand Structure in 2025: Who Really Needs Platinum?

Demand for platinum is distributed across various sectors:

• Automotive Industry (41%): 3,245 kilounzen, growth of 2%
• Industrial Applications (28%): 2,216 kilounzen, decline of -9%
• Jewelry (25%): 1,983 kilounzen, growth of 2%
• Investments (6%): 420 kilounzen, growth of 7%

Total demand decreases by 1%, but remains relatively stable. The decline in industrial demand is offset by gains in other areas — a delicate balance.

Platinum or Gold: Which Precious Metal Fits Which Strategy?

Gold shines as a classic store of value and crisis hedge. It is more liquid, widespread, and less volatile. Its narratives are straightforward: inflation, geopolitics, monetary policy. The price is primarily driven by investment flows.

Platinum, on the other hand, is a hybrid: partly an investment asset, partly a real consumable with industrial demand. This results in higher volatility but also offers greater opportunities for traders to capitalize on fluctuations. The rarity of platinum (less common than gold) is neutralized by its lower demand — so far.

Investment Opportunities: From Conservative to Speculative

Physical Investment: Coins and bars offer ownership in the traditional sense but require secure storage and incur high transaction costs.

ETFs and ETCs: These instruments replicate price movements without physical possession and integrate seamlessly into existing portfolios.

Mining Stocks: Investing in companies benefits from leverage effects during price increases.

Derivatives for Professionals: CFDs and futures allow speculative trading with leverage. CFDs enable opening large positions with small capital — with corresponding risk.

Strategies for Active Traders: Trend Following with Risk Management

Active traders can profit from platinum’s volatility. A proven strategy is trend following with moving averages:

Use a fast (10-day) and a slow (30-day) moving average. When the fast crosses above the slow, it signals a buy. The position is closed when the fast crosses below the slow. Leverage of 5:1 can help amplify gains.

Risk management is critical:

• Risk only 1-2% of total capital per trade
• Set a stop-loss about 2% below entry price
• Example: With €10,000 capital and 1% risk (€100) with 5x leverage → maximum position €1,000

Platinum as a Portfolio Diversifier: The Hedge Effect

For more conservative investors, platinum can be a valuable addition. Its supply and demand dynamics cause it to move somewhat independently of the stock market. This can provide long-term protection for a US equity portfolio.

The allocation should be determined individually — too much volatility can increase overall risk. Combining with other precious metals and regular rebalancing makes sense.

Outlook 2025: Neutral to Slightly Positive, with Risks

The platinum forecast for 2025 is neutral to slightly positive. The structural deficit of 539 kilounzen should support the price. However, the situation also carries risks:

After steep price increases since the beginning of the year, the risk of consolidation until year-end has risen. While the price rise is supported by real physical scarcity, speculative buying has also occurred. Profit-taking could follow.

Key factors influencing price development include: dollar trends, demand stability (especially under pressure from US tariffs), and actual supply volumes.

Platinum investors should monitor lease rates — these serve as early warning indicators of market stress.

Conclusion: Platinum Has Reinvented Itself

Platinum was long considered the black sheep among precious metals. The combination of supply shortages, stable demand, and macroeconomic factors is leading to a reevaluation in 2025. Whether platinum or gold: both have their justification. Gold for conservative investors and hedges, platinum for active traders and those seeking volatility. The coming months will reveal whether this upward trend will persist or if a consolidation follows.