As gold prices enter a phase of consolidation, investors are increasingly turning to other precious metals—namely silver and platinum—to tap into new value opportunities. While gold has lagged behind recently, with short-term pressures from the Fed’s hawkish policies failing to provide support, a surge of interest in platinum is currently driving its price higher.
Analysts at Heraeus note that although there are long-term reasons to remain bullish on gold, as its price hovers around the key resistance level of USD 3,450 per ounce, speculators and investors are now favoring platinum as an alternative. With the current platinum-to-gold ratio, funds invested in gold could now purchase nearly three times as much platinum.
In addition, BMO Capital Markets’ third-quarter forecast has suggested that gold’s upward momentum may soon be on hold—after achieving roughly a 30% gain year to date. BMO is particularly upbeat about platinum, with analysts predicting that its price could reach USD 1,500 per ounce by the end of the year. This projection implies a potential upside of approximately 10% from current levels. Spot platinum is trading at USD 1,347 per ounce, up 2%.
Further evidence of platinum’s rising prominence can be seen in its futures market, where open interest has surged by 34% since early May, compared to a modest 2% increase for gold. Similarly, platinum ETF holdings have grown by 1.17% to 3.22 million ounces, while global gold ETF holdings have seen an increase of less than 0.5%. These trends indicate a growing focus on platinum, largely driven by its favorable price momentum, which in turn may be sparking a sense of “FOMO” among traders.
Overall, Heraeus analysts observe that an increase in both price and alternative investment demand is positioning platinum as the market’s asset of choice. However, with speculative long positions nearing extreme levels, investors should remain cautious of possible price corrections while pursuing short-term gains.
On the fundamentals side, after several years of supply constraints, the platinum market appears to be drawing down investor inventories to restore balance, thereby propelling prices upward. Looking ahead, continued shortages may force prices to new highs that encourage further sell-offs of existing inventory, suggesting additional upside potential for platinum in the second half of the year.
Lastly, turning to silver, BMO analysts maintain a bullish outlook, although they believe its short-term upside remains limited. Fund rotations have lifted silver prices markedly over recent weeks, with prices reaching a 13-year high of USD 37.30 per ounce in mid-June. Yet, despite this momentum, pressures such as U.S. tariffs on solar products and a shift in pricing strategies by China’s photovoltaic sector could temper demand for silver in the near term.
