Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
UBS Global Research recently increased its platinum price prediction to $1,100 per ounce, representing a nearly 15% jump from current evaluations. The banking giant’s research group set the target price for mid-2025 as experts anticipate the shiny metal to ride a collective wave of precious metals appreciation. According to UBS analysts, various economic factors will contribute to a significant rise in platinum’s worth.
Wait, what’s platinum?
Gold and silver are the most popular and widely held of the four precious metals, leaving many investors in the dark about other options. Platinum is a silvery-white metal with exceptional industrial demand due to its ability to catalyze chemical reactions without being consumed. This unique characteristic translates to widespread adoption across automobile, electronics, green energy, and jewelry sectors.
👉 Related Reading: History of Platinum
The Main Factors
Experts highlight two key factors influencing the platinum price that could be driving a rise in value throughout the next year:
- Rate Cuts – The Federal Reserve’s anticipated rate cuts are likely to dampen dollar demand due to falling interest rates. Often, this easing cycle kickstarts a transition into safe-haven assets like precious metals as investors seek more stable instruments.
- Chinese Demand – China, the single-largest platinum buyer, is expected to ramp up its purchases of the metal over the next few years. That nation’s leading role in EV manufacturing comprises much of that demand, and production is slated to increase.
A Delayed Response
UBS anticipates that platinum’s price movement will follow in the wake of gold, exhibiting a delayed reaction to broader market conditions. As the most actively traded precious metal, gold often sets the pace for other precious metals, including platinum. “We expect platinum to lag gold until lower rates support stronger industrial activity,” UBS analysts explained. This price-action relationship suggests that as gold experiences a significant rally, the positive momentum could extend to other metals like silver and platinum, particularly as economic conditions shift in favor of industrial metals.
“Cautious Optimism”
The research group’s outlook on platinum could be most accurately described as “cautious optimism.” Despite the call for higher prices, analysts point to headwinds in the short term. Namely, a short-term dip in demand could result in significant price fluctuations. Due to platinum’s small market size, volatility isn’t uncommon. It’s important to note that UBS expects this drop in demand to correct in the long term.
Supply Outweighing Demand
Even with the slowdown in purchases, platinum could see a boost from dwindling supplies. Experts believe demand is on track to outstrip supply, which could push prices higher. “The platinum market is forecast to record its largest supply shortfall in ten years,” according to Johnson Matthey, a London-based sustainable energy company. When demand exceeds supply, it often drives prices up, and this imbalance could lead to a notable surge in platinum’s value.
Should I buy platinum?
When the largest private bank in the world forecasts higher prices for an asset, investors are going to pay attention. Naturally, many investors are now wondering if they should add this metal to their portfolio. There are plenty of reasons to consider platinum and expected price increases only sweeten the pot, right? Often it’s not that simple. Even with an anticipated rally, platinum isn’t automatically a buy. Investors should consider this asset against their overall financial goals.
👉 Related Read: Top Reasons to Consider Platinum