Disclaimer: Opinions are our own and not financial or investment advice
A lot is written about gold and silver predictions, there is hardly any research on platinum predictions.
At jpost.com, we try to fill that gap by presenting readers with our platinum prediction research readout.
Table of contents
We look at the following topics in this article. Readers who are only interested in the specific platinum predictions for 2025, not in the research, may scroll down to the bottom to find our best case and base case platinum forecast 2025.
- The importance of platinum as a physical metal
- The importance of platinum as portfolio diversification
- The role of platinum the precious metals universe
- The platinum chart
- The correlation between platinum and silver
- Physical market supply/demand
- Platinum prediction 2025 – summary
- Platinum predictions 2025 by financial institutions
1. The importance of platinum as a physical metal
Platinum, a precious metal known for its luster and durability, is also a cornerstone of modern industry. Its unique properties and versatility make it indispensable in various applications.
- Catalytic Properties:
- Reduces harmful emissions in catalytic converters
- Facilitates chemical reactions in industrial processes
- Improves efficiency of fuel cells
- Industrial Applications:
- Electronics: Electrodes, electrical contacts, optical fibers
- Healthcare: Pacemakers, dental implants, chemotherapy drugs
- Automotive: Catalytic converters, spark plugs, turbine blades
- Jewelry: Popular choice for its beauty and durability
- Physical Properties:
- High melting point
- Malleable and ductile
- Resistant to corrosion
- Economic Value:
- Highly sought-after metal due to its versatility and scarcity
- Plays a vital role in driving innovation and economic growth
2. The importance of platinum as portfolio diversification
Platinum, a precious metal often overshadowed by its more well-known counterparts, gold and silver, offers unique investment opportunities due to its distinct characteristics and market dynamics. As a component of a diversified portfolio, platinum can provide several advantages:
1. Diversification Benefits:
- Uncorrelated Returns: Platinum’s price movements often diverge from those of traditional assets like stocks and bonds, offering a potential hedge against market volatility.
- Reduced Risk: By adding platinum to a portfolio, investors can spread their risk across different asset classes, mitigating the impact of potential losses in any single asset.
- Enhanced Returns: Platinum’s price fluctuations can generate attractive returns, contributing to the overall performance of a diversified portfolio.
2. Precious Metals Synergy:
- Complementary Exposure: Combining platinum with other precious metals, such as gold and silver, can provide a broader exposure to the precious metals market, capturing potential upside movements in different segments.
- Risk Management: Strategically allocating investments across precious metals can help mitigate the impact of fluctuations in any individual metal’s price.
3. Long-Term Investment Potential:
- Structural Demand: Platinum’s industrial applications, particularly in the automotive and electronics sectors, create a solid foundation for long-term demand.
- Scarcity and Supply Constraints: The limited supply of platinum relative to its demand can support its price over the long term.
4. Tactical Allocation Strategy:
- Buy on Dips: Consider adding platinum to your portfolio when its price falls to a historically significant support level, potentially offering a favorable entry point.
- Gradual Accumulation: As platinum’s price appreciates, gradually increase your allocation to capture potential upside while managing risk.
5. Chart Analysis: A Long-Term Perspective
3. The role of platinum the precious metals universe
As we gain an understanding of the importance of having some exposure to physical platinum, we now pivot to platinum’s leading price indicators as well as intermarket dynamics.
Platinum, being one of the 4 precious metals, has a rather strong correlation with other precious metals, particularly gold and silver.
However, there are some specific things that investors should know about intermarket dynamics between platinum and the precious metals universe. This is critical, both from an investor perspective and also to set the expectations right for a platinum forecast for 2025.
- Platinum positively correlated to gold and silver over a long period of time.
- The correlation is not strong on a short timeframe, certainly not on a day-by-day basis.
- Platinum tends to thrive when gold is in a long term bull market. It typically is a leveraged play on gold’s secular bull market.
- Conversely, platinum tend to underperform gold when gold was going down (2013-2016).
The chart below, exhibiting all 4 precious metals, over a period of 30 years, helps us create a framework for a reasonable platinum prediction for 2025 and beyond.
Take-away – Platinum is expected to have a bullish bias in 2025 as gold’s bull market is now here to stay.