Why platinum just broke a decade long resistance

Platinum's price has never managed to make a weekly close above this line of resistance. And now, in May of this year, we finally saw that happen.

Past performance isn’t a reliable indicator of future results.

Since its breakout in May of this year, platinum's strength has so far been relentless. In fact, if we zoom in a little bit closer and compare platinum's returns to the S&P 500's since the beginning of 2025, we see that platinum has returned about 50%.

Platinum has significantly outperformed the stock market by over 45%

Surprisingly, platinum's impressive strength during this period has flown right under the radar for most investors. The question now is whether platinum strength can continue, potentially accelerating higher, or whether all the juice has already been squeezed out of platinum and it's bound for another lengthy bear market like we saw in the 2010s.

If we rewind to the early 2000s, we immediately see incredible periods of strength on platinum are not out of the ordinary. Between October 2001 and January 2008, platinum rallied by over 400%. Between August 1977 and March 1980, platinum moved up by a massive 555%, with both of these examples ending in a spectacular parabolic melt-up.

If we compare these moves to the price action that we've had today, we do see some similarities.

But it would be overly simplistic to draw quick conclusions from this. This type of strength on platinum requires a very specific set of conditions. Like with many commodities, the price action comes down to supply and demand dynamics—but with a bit of a twist, and we'll get to that twist later.

So first, let's look at the supply of platinum. Notice on this chart how platinum supply grew for decades but tapered off and plateaued around 2005. This has led to supply-demand imbalances that continue today and have played a big part in platinum's price dynamics.

This chart shows those imbalances going back to 2014. After two years of platinum supply surplus in 2021, in 2022 demand has since far outstripped supply. That platinum deficit grew deeper in 2024 and is projected to remain in 2025.

What's causing that supply shortfall? The answer is in this chart, which shows where most of the world's platinum comes from. South Africa accounts for 70% of global platinum production, making platinum supply incredibly concentrated to just one country—and vulnerable to supply shocks.

And that's just what has happened. In 2023, widespread blackouts in South Africa led to mining shutdowns that threaten global supply, underscoring this vulnerability.

Platinum supply could be in a major squeeze right now

And this chart shows the cost of borrowing physical platinum. The lease rate is higher when platinum is more scarce, and the lease rate recently climbed to near 15%—a record high that shows the scarcity of this precious metal at the moment.

And the World Platinum Investment Council has forecasted that lower supply will push platinum deficits even higher than anticipated this year. It's clear that platinum production has some significant catching up to do in order to meet demand.

Where is all that demand for platinum coming from?

The biggest consumer of platinum is the automotive industry, which uses the precious metal as a catalyst in catalytic converters, which makes fumes from car exhausts less toxic.

As emission standards tighten, demand for platinum has grown because of its role as a catalyst in the automotive industry. This seems likely only to grow as regulations become more strict and require more platinum in exhausts to reduce emissions.

The other big consumer of platinum is the jewellery industry, at 27%. Platinum jewellery has long been a staple in many countries, particularly China, favoured for its sturdiness, weight, and appearance. And the price discount compared to gold has certainly been a big factor as well.

China's demand has shown signs of picking up, and the country recently imported more platinum than it had in over a year. This comes particularly after rising gold prices have made platinum a more affordable alternative material.

Much of this is coming from the huge surge in gold prices lately, which makes consumers seek more affordable metals instead—and platinum fits the bill.

On the flip side though, demand for platinum may decline as a result of the shift towards electric vehicles. That's because EVs don't have exhausts or emissions, so they don't need catalytic converters or platinum.

Going forward, the World Platinum Investment Council projects that the ongoing supply deficit will continue until at least 2029. And as demand seems to be picking up, that suggests a possible squeeze on platinum's availability, which could put more upwards pressure on price as well.

But there is a catch here which should be pointed out, and that comes down to how demand for platinum is calculated. Research firm CPM Group has pointed out that if you exclude investment demand—which stands at 9%—then there is no platinum deficit.

Why would investment demand be excluded? Because it doesn't transform or use the platinum it buys. Instead, that platinum is kept in its original form and can then be sold back to market.

This doesn't contradict very real growth trends in demand, but it's a caveat worth considering and could put a bit of a damper on the bullish case for platinum.

At Capital.com, we'll keep you posted on the price movements of precious metals like platinum and gold, along with other major market developments.

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