Full article posted on www.marketwatch.com
Platinum has outpaced its precious-metals peers this year, climbing 44% even as gold advanced 29%. While a persistent supply deficit remains the foundation of platinum’s price gains, a growing phenomenon dubbed “gold fatigue” is driving investors and jewelers to rotate into platinum—and CPM Group’s analysis sheds light on why this trend is likely to continue.
Understanding “Gold Fatigue” and Portfolio Rotation
Gold’s strong performance—up nearly 30% year-to-date—has prompted investors to seek fresh opportunities in platinum, silver, and PGMs.
“Gold fatigue” describes the shift by investors and consumers from gold into alternative metals offering value and upside potential.
Jewelers in China are increasingly choosing platinum over gold due to cost considerations and evolving consumer preferences, according to Indxx’s Vaihab Agarwal.
Structural Supply Deficit in the Global Platinum Market
Even without rotation flows, platinum’s fundamentals support strong price performance:
Year-to-date 2025: Platinum trades near $1,313/oz, its highest finish since September 2014.
Supply shortfall: The World Platinum Investment Council (WPIC) forecasts a 966,000-ounce deficit this year—the third consecutive annual deficit.
Long-term outlook: WPIC expects deficits to persist through 2029, underpinned by limited mine output and robust fabrication demand.
Jewelry and Investment Demand Trends
Jewelry demand in China: Platinum-jewelry fabrication rose 26% in Q1 2025, even as gold jewelry sales fell 32% year-on-year.
Investment demand: Platinum bars and coins are gaining traction, particularly in markets sensitive to high gold prices.
Comparison to palladium: Platinum’s 44% gain comfortably outpaces palladium (17% YTD) and silver, highlighting strong fabricator and investor appetite.
Recycling Potential and Supply Challenges
Current stock levels: Above-ground reserves amount to only three months’ worth of demand—an unsustainably low buffer.
Catalytic converter recycling: Only 25% of platinum supply comes from recycling, despite decades of PGM use in auto exhaust systems.
Opportunity: Scaled end-of-life recycling programs could double recycled output, easing extraction pressures.
CPM Group Insights and Market Forecast
In a recent video interview, Jeffrey Christian, Managing Director at CPM Group, argues that true supply of refined platinum remains sufficient when investment demand is excluded from fabrication balances:
Market balance: CPM Group forecasts a 329,000-ounce surplus in 2025 once investment demand is accounted for correctly.
Investment demand “myth”: Christian cautions that treating investment flows as fabrication overstates physical tightness—investment-held metal remains available for resale.
Long-term view: With global vehicle production shifting away from PGM-intensive engines, Christian sees potential for platinum prices to moderate once speculative demand wanes.
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