Is Platinum the Next Precious Metal to Surge After Gold’s Breakout?

Platinum (XPL) is emerging as a compelling opportunity in the precious metals space. While gold (XAU) has surged to record highs and silver gains momentum, platinum remains undervalued. Moreover, a combination of deep supply deficits, long-term technical breakouts, and a rising platinum-to-gold ratio suggests that the metal may be gearing up for a powerful move. As market dynamics shift and investors search for the next breakout candidate, platinum’s unique position points to significant upside potential in the months and years ahead.

Platinum Supply Deficit Deepens as Mine Output Falls and Stocks Shrink

The platinum market is heading into its third straight annual deficit. The World Platinum Investment Council (WPIC) forecasts a shortfall of 850,000 ounces in 2025. This comes despite a 22% drop in year-over-year demand. The persistent gap is driven by weak mine supply and stagnant recycling, not by surging consumption.

Mine Supply Weakness and Recycling Constraints

The production remains the most significant issue in 2025. Global refined output dropped to 1.45 million ounces in Q2 2025, down from 1.54 million in Q2 2024. South Africa, the world’s top producer, was hit by heavy rainfall in Q1, and Q2 output still came in 8% below 2024 levels. The WPIC expects South Africa’s total mine supply to fall 6% this year. On the other hand, analysts forecast a 4% decline in Zimbabwe and a 26% drop in North America. However, they expect Russia to see a minor 1% increase.

Meanwhile, the recycling supply is improving but remains weak. Secondary supply rose 6% year-on-year to 1.6 million ounces, driven by gains in automotive recycling. Still, the WPIC notes that levels are historically low. According to WPIC, platinum recycling is far less responsive to price than palladium or rhodium. As a result, even with prices above $1,450 in July, scrap inflows remain limited.

Shrinking Stockpiles and Mixed Demand Outlook

Total platinum supply is expected to decline 3% in 2025 to 7.03 million ounces. At the same time, aboveground stockpiles continue to shrink, with inventories projected to fall 22% this year to 2.98 million ounces, down from 5.51 million in 2022.

On the demand side, the outlook remains mixed. Industrial use is expected to drop 22%, and automotive demand could fall 3% due to slower car production. However, WPIC expects jewellery demand to increase 11% this year to 2.23 million ounces, driven by platinum’s discount to gold. Wholesalers in China are driving a 42% surge in fabrication as they shift focus from falling gold sales.

In 2025, tariff uncertainty has added volatility to investor demand. Physical platinum flowed into the U.S. earlier this year on fears of trade restrictions. While those concerns briefly eased, they resurfaced after copper tariffs were announced. The geopolitical risks involving South Africa continue to threaten supply.

Despite a decline in overall demand, the supply deficit remains substantial. Although prices are rising, they are still not high enough to incentivize new mining projects. Deep-level mining remains costly, and even a 50% increase in basket prices is unlikely to trigger fresh supply. For now, structural tightness continues to support a bullish outlook for platinum prices in 2025.

Platinum-to-Gold Ratio Signals Potential Catch-Up Rally Ahead

Historically, platinum has followed gold’s lead during primary bull cycles. In the late 1970s and early 2000s, gold broke out first, while platinum followed later with stronger percentage gains. This lagging behaviour presents a second-chance opportunity for investors who missed gold’s initial move. Once gold confirms a breakout, platinum typically follows with greater volatility and upside potential.

Platinum historically traded at a premium to gold. From the late 1990s to 2008, the platinum-to-gold ratio stayed above 1.0, indicating platinum was more expensive than gold. However, this trend reversed after the 2008 global financial crisis. Since then, platinum has traded at a consistent discount, with the ratio steadily declining within a well-defined descending channel.

The chart below shows the descending channel in the platinum-to-gold ratio. The ratio has been trading within this channel for nearly 15 years, capped by a strong downward trendline. Key breakdowns occurred in 2011 and again in 2020, each followed by failed attempts to reclaim higher levels. As of 2025, the ratio remains suppressed near 0.38, indicating that platinum is worth only 38% of the gold price.

However, the recent rebound in the ratio in 2025 presents signs of life. The ratio bounced off the lower support of the channel and surged briefly toward the 0.50 level. This rebound suggests growing momentum for platinum as gold has already confirmed its long-term breakout. If the ratio breaks the descending trendline and reclaims the 0.50–0.55 zone, it could mark the beginning of a structural rotation back into platinum.

This ratio serves as a key signal for investors. A rising platinum-to-gold ratio indicates that platinum is outperforming gold, typically during early commodity cycles or inflationary periods. If gold continues to climb and the ratio confirms a breakout, platinum could enter its own bull phase, similar to the previous decades.

Platinum Technical Analysis: Inverted Head and Shoulders Confirms Long-Term Bottom

The long-term outlook for platinum remains strongly bullish as prices emerge from a significant support zone near the $600 level. Historical price action shows that platinum formed a solid bottom between the 1980s and early 2000s. This consolidation phase was followed by a powerful rally from the 2001 low of $403 to an all-time high of $2,299 in 2008.

However, the global financial crisis in 2008 triggered a sharp correction, with platinum falling to $752.50 by Q3 2008. While gold prices continued to rally after the crisis, platinum entered a prolonged period of consolidation. This phase gradually formed a bottoming structure that became more defined between 2015 and 2025.

Notably, the above chart shows an inverted head and shoulders pattern forming during this period. In Q2 2025, platinum broke above the neckline of this pattern and continued to rally into Q3 2025. This breakout confirms a structural bottom and suggests that platinum is now entering a long-term bullish cycle. This cycle is likely to continue during the years ahead.

Key Levels for Platinum Investors

The chart below confirms a strong bottoming pattern, as prices have formed an inverted head and shoulders near the $625 level. This bottom was established in March 2020, and prices broke above the $1,200 region in Q2 2025. The breakout at $1,200 has opened the door for a move toward the $1,700 zone.

The formation of the inverted head and shoulders pattern suggests that the $1,200 level will likely act as new support. This structure points to continued upside toward record levels in the coming years. The immediate resistance lies near $1,700, and a breakout above this zone could drive prices further toward $1,900 and potentially $2,170.

This bullish price action is further confirmed by the weekly chart, which shows a rounding cup formation developing between 2021 and 2025. A breakout in May 2025 near the $1,050 level opened the door for a strong surge in platinum prices.

The chart also highlights a sharp reversal in July 2025, producing a strong buy signal near the $1,270 area. Since then, prices have continued to move higher. The $1,270-$1200 level now acts as key support, aligning with the highs from February 2021. As long as platinum remains above this zone, the bullish trend is likely to continue.

Therefore, investors can treat a correction to the $1,200–$1,270 range as a strong buying opportunity to target record levels in platinum.

Platinum vs. Gold, Silver, and Palladium: The Most Undervalued Precious Metal

The chart below highlights a clear divergence in performance among the primary precious metals during the past decade. Gold and silver (XAG) have shown strong upward momentum since late 2023, while platinum continues to lag. On the other hand, Palladium (XPD) peaked in 2022 and entered a prolonged downtrend, surrendering much of its earlier gains.

Gold is leading the current cycle with a powerful uptrend, recently breaking into new all-time highs. Silver has also followed with a sharp rally, driven by rising inflation concerns and renewed global uncertainty. However, platinum remains the least responsive among the group and continues to trade below its previous highs.

This underperformance makes platinum stand out as the undervalued primary precious metal today. While palladium once held a steep premium over the others, its price has collapsed from extreme highs. Platinum now trades well below gold and silver, despite its strengthening industrial and investment appeal. Historically, platinum has traded at or above the price of gold during bull markets. This makes the current discount historically rare and potentially temporary.

Platinum lags behind gold in the early stages of a commodity rally. Capital usually flows first into the most liquid and widely followed metal. However, once confidence builds and technical breakouts occur, platinum tends to deliver sharper percentage gains. This pattern has repeated across multiple commodity cycles.

With gold and silver accelerating, and palladium weakening, platinum may now be positioned as the “catch-up trade” in the precious metals complex. This trend is already evident in the chart below, reflecting last year’s performance. Platinum has gained over 57% in 2025 through 19 September. These gains outperform gold and palladium and are nearly equal to the silver gains. This strong performance suggests that platinum is showing clear signs of a catch-up rally in 2025.

Platinum Positioned for Multi-Year Upside as Fundamentals and Technical Align

Platinum is entering a critical phase. The fundamentals point to a persistent supply deficit, shrinking stockpiles, and limited mine response. Demand remains stable, with jewellery demand rising and industrial usage expected to recover. Structural tightness and increasing global interest in undervalued assets are driving support for prices, despite macro uncertainty.

From a technical perspective, platinum is breaking out of historic bullish patterns. The inverted head and shoulders formation, long-term base structure, and rising momentum all support a positive outlook. Moreover, platinum remains deeply discounted compared to gold and silver. If the platinum-to-gold ratio breaks above the 0.50 level, the metal could deliver substantial percentage gains. Therefore, any correction in platinum toward the $1,200–$1,270 zone should be viewed as a buying opportunity to target new record levels.