Platinum markets are flashing warning signs of a potential squeeze, with spot prices surging and the gap between London and New York benchmarks widening to unusual levels, echoing recent turbulence in silver markets.
Spot platinum in London jumped as much as 6.4% to $1,646.03 per ounce on Wednesday, marking its biggest intraday gain since 2020. Meanwhile, Nymex platinum futures rose only 4.1%. The significant divergence—normally the two trade in lockstep—saw the spot contract’s premium over futures surge to $53.45 per ounce, up from $28 just a day earlier.
The price action suggests intensified scrambling for immediate physical delivery, mirroring patterns seen in silver earlier this month. Platinum is tightening heavily with dislocations now pushing extremes, echoing fears of another silver-squeeze moment, said Dan Ghali, Senior Commodity Strategist at TD Securities. Ghali noted the squeeze is particularly odd given seemingly ample supply, including China’s export of 140,000 ounces of platinum products last month—the highest on record.
Craig Miller, CEO of Valterra Platinum, argues the rally is sustainable, underpinned by a structural supply deficit. Platinum has climbed 87% this year, attracting investors seeking alternatives to gold, which has approached record highs in real terms.
I do think we need to recognize that platinum does have similar unique properties to gold in terms of its scarcity, durability, high unit value, and liquid trading platforms, Miller said. UBS echoed this view, describing platinum in a recent report as a quasi-monetary hard asset and a scarcity-backed store of value.
The World Platinum Investment Council forecasts a third consecutive annual deficit of around 850,000 ounces this year. Miller attributes improved price outlook to concerns over declining mine supply of platinum group metals (PGMs). He emphasized that while gold’s momentum has lifted PGM prices, current market conditions don’t indicate “frothiness.”
The broader PGM complex has rallied strongly, with palladium gaining 33% and rhodium up 10% over the past month. According to René Hochreiter, Analyst at Noah Capital, the industry’s average spot cash margin has expanded to approximately 42%, boosting company valuations.
Platinum equities, accounting for roughly 11% of the JSE All Share Index, have soared. Northam Platinum Holdings leads with a 215% year-to-date surge, followed by Impala Platinum and Valterra, both up 142%. Sibanye-Stillwater outperforms all, rising 235%, aided by its significant gold production.
