The Historical Relationship
From 1987 to 2014, platinum consistently traded above gold, sometimes at a 2:1 premium
The reversal began in 2015, driven by the Volkswagen diesel emissions scandal and shifting automotive trends
Today, platinum trades at roughly half the price of gold
The Bull Case for Platinum
### Supply Constraints
Annual production is only ~6 million ounces (vs. ~110 million oz for gold)
70% of supply comes from South Africa, where mines face aging infrastructure, labor disputes, and power grid instability
Russia accounts for another ~10%, adding geopolitical risk
### Demand Drivers
Hydrogen Economy:: Platinum is essential in fuel cell technology — every hydrogen fuel cell vehicle requires approximately 30–60 grams of platinum
Green Hydrogen:: Platinum catalysts are used in electrolyzers that produce hydrogen from water
Substitution from Palladium:: As palladium prices soared, automakers began substituting platinum in gasoline catalytic converters
Jewelry:: Platinum jewelry demand remains strong, particularly in Japan and China
The Risk
The shift away from internal combustion engines could reduce catalytic converter demand long-term. However, the hydrogen economy may more than offset this decline.
The Opportunity
At current prices, platinum offers a rare combination: a metal rarer than gold, with growing industrial applications, trading at multi-decade lows relative to its peers.
Interested?
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