Reevaluating the investment value of silver and platinum: opportunities behind the decade-highs

Precious Metals Market Movements: Silver and Platinum Lead the Rally

In recent months, the precious metals market has shown a divergence trend. In late September, silver broke through the $45/oz level, and platinum surpassed $1550/oz, both reaching their highest levels since 2011 and 2013 respectively. In contrast, gold’s gains during the same period have been relatively moderate. Since the beginning of this year, silver has increased by 55%, and platinum by 71%, both significantly outperforming gold’s 41% rise. This phenomenon of “non-mainstream precious metals leading the rally” warrants in-depth analysis.

From Safe-Haven Sentiment to Valuation Reversion

The main drivers behind the overall rise in precious metals include two aspects. On one hand, increasing uncertainty in the global economic outlook and frequent geopolitical risks have heightened investors’ risk aversion; on the other hand, major central banks have shifted towards easing monetary policies, with the Federal Reserve continuing to cut interest rates, significantly reducing the holding costs of precious metals.

However, the outsized gains in silver and platinum also have deeper logic. The gold-silver ratio and the gold-platinum ratio have long been in a state of imbalance. Their reversion process indicates that capital is shifting from relatively overvalued gold to undervalued silver and platinum for valuation correction. This valuation repair momentum is strong and has become a key driver pushing up these two types of precious metals.

Structural Supply Shortages

Supply-side constraints are another core factor supporting prices. According to the World Silver Survey, the silver market is expected to experience a severe shortage by 2025, with total supply unable to meet demand for the fifth consecutive year. More concerning is that, based on current consumption rates, known silver reserves on Earth could face depletion before 2050.

The platinum market faces a similar dilemma. The World Platinum Investment Council announced that by 2025, the platinum market will see a supply deficit for the third consecutive year, with a projected shortfall of 30 tons. Industry experts point out that the platinum industry has entered a prolonged structural shortage, with mine supply facing long-term downward pressure.

Institutional Forecasts: Optimistic Outlook for Platinum Prices

Supported by these fundamentals, market institutions generally hold a positive outlook for silver. The commodity analysis team at UBS expects silver prices to further rise to the $52–58 range. Nomura Securities also stated that, compared to gold, which has limited upside potential recently, silver’s dual industrial and safe-haven attributes make it increasingly attractive for investment.

More aggressive voices come from BNP Paribas, which believes that silver is currently undervalued and possesses dual characteristics, with the potential to reach $50 in the short term and possibly extend its upward trajectory to $100 in the long term.

Regarding platinum’s prospects, Deutsche Bank remains bullish, believing that under the dual support of supply deficits and structural demand, platinum’s strong trend will continue. If the gold-platinum ratio can revert to its historical reasonable level of 2, platinum prices could rise above $1850.