This year has seen a collective surge in the prices of precious metals, with platinum seeing a gain of up to 93%, making it one of the most watched assets in the market.

And analysts generally believe that the upward trend in platinum will continue. Muhammad Umair, a financial analyst at FXEmpire, said that the platinum price broke the downward trend that had continued for several years this year, marking the beginning of a revaluation cycle, and capital is flowing to undervalued precious metals.

He expects platinum to soar to the 2,170-2,300 range by 2026. This outlook is significantly higher than the expectations of other Wall Street institutions, many of which believe the median price of platinum next year will be between $1,550 and $1,670 per ounce.

Opportunities and risks

Umair pointed out that the main reasons for the rise in platinum prices are the increasing industrial demand and the tightening supply structure. On the demand side, the recovery of the fuel cell industry could have a positive impact. On the other hand, South Africa, which accounts for more than 70% of global platinum production, is still limited by power shortages, mine body aging and rising operating costs, causing supply problems.

Meanwhile, platinum is playing an increasingly important role in the clean energy technology sector, as a key catalyst in hydrogen fuel cells and electrolysers, which are key components of the hydrogen strategies in the United States, Europe and China.

Umair expects demand related to hydrogen energy to grow steadily over the next decade. If the construction of hydrogen energy infrastructure goes as planned, this trend will be a long-term positive for platinum.

He also emphasized that capital is flowing to metals that are undervalued as the price of gold approaches record highs. While platinum does not benefit as much from central bank buying as gold, it is very sensitive to the macroeconomic situation. The trend of the Fed cutting interest rates and the decline in real yields has created a favorable environment for all precious metals.

Looking at the data, the price of gold has increased by more than 300% over the past decade, while the price of platinum has only increased by 100% during the same period. However, the upward trend in platinum prices is clearly strengthening by 2025. In just one year, the price of platinum has surged by more than 90%, far exceeding the increase in gold.

The ratio of gold to platinum is also brewing a trend. The ratio reached a peak of 3.59 in April this year and then plummeted to the current 2.47. If it breaks through further below 2.2, it may fall to 1.8-2.0. This means that the platinum price still has a larger room for appreciation relative to the gold price.

But some institutions are also warning that platinum prices are now close to multi-year highs, and investors need to remain cautious, especially given the market's sensitivity to global economic fluctuations, and a technical correction is inevitable.

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