Platinum price forecast: what next for the vital rare metal?

Author: Peter Henn

The commodity has been on a roller coaster recently, but what is the platinum price forecast?

Piled up platinum bars
Learn more about this precious metal’s value in our platinum price forecast – Photo: Shutterstock
Platinum
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The price of platinum, a very rare and incredibly precious metal, is currently in the news. Here we tell you what has been going on, and what might happen in the future with a platinum price forecast. 

What platinum does

Platinum is mostly mined in South Africa, Russia, Zimbabwe, Canada and the US, and has a number of important industrial uses. While it is a scarce metal, more than 20 times rarer than gold, it is used primarily in:

  • Manufacturing: According to the World Platinum Investment Council, platinum’s versatility keeps it in demand. Industrial use of platinum has increased nearly fourfold since 1980.

  • Healthcare: Platinum is a biologically compatible metal because it is non-toxic and stable. It does not react with, or negatively affect, body tissue. It is used in surgical instruments, implants, pacemakers and cancer treatment.

  • Environmental products: Platinum’s properties make it critical to reducing air pollution and in the construction of energy-efficient fibreglass.

  • Catalytic converters: Interaction with the surface of platinum converts toxic gases and pollutants from internal combustion engines into less toxic pollutants.

The demand for platinum in the car industry has been hit by falling demand for diesel cars. Petrol cars, which use palladium in the manufacturing process, have become more popular after the European Union introduced tighter restrictions on polluting cars and diesels fell out of favour.

Market impacts

Platinum price history

Date Close Change Chg% Open Min. Max.
2022-09-30 884.05 7.00 0.80 877.05 866.4 887.73
2022-09-30 877.0 -1.83 -0.21 878.83 874.2 888.98
2022-09-30 878.88 -7.62 -0.86 886.5 875.05 891.08
2022-09-30 886.45 7.90 0.90 878.55 878.55 896.28
2022-09-30 878.5 -17.65 -1.97 896.15 874.25 898.13
2022-09-30 896.2 -1.75 -0.19 897.95 896.2 900.73
2022-09-30 897.5 -3.23 -0.36 900.73 887.48 905.68
2022-09-30 900.83 15.58 1.76 885.25 881.85 903.38
2022-09-30 884.65 -18.35 -2.03 903.0 880.3 908.93
2022-09-30 902.9 2.77 0.31 900.13 894.3 914.33
2022-09-30 898.05 -8.13 -0.90 906.18 897.05 910.93
2022-09-30 906.28 2.18 0.24 904.1 904.1 907.68
2022-09-30 904.9 6.37 0.71 898.53 887.63 910.18
2022-09-30 898.48 7.45 0.84 891.03 886.78 903.28
2022-09-30 890.88 16.65 1.90 874.23 869.35 896.78
2022-09-30 874.28 -14.72 -1.66 889.0 866.8 900.28
2022-09-30 888.75 12.62 1.44 876.13 873.2 893.88
2022-09-30 876.03 2.93 0.34 873.1 871.6 876.28
2022-09-30 873.4 -16.53 -1.86 889.93 866.9 893.33
2022-09-30 889.73 6.13 0.69 883.6 870.45 890.63

What appears to be driving the issues with the price of platinum has been the current shortage of semiconductor chips. This shortfall has, in turn, had an impact on the car industry. Car plants have shut and manufacturers have cut their forward predictions for the number of cars being made, which has had an impact on the price of platinum and its sister metals, rhodium and palladium. 

In May 2021, analysts Johnson Matthey issued their annual platinum report. In the document, the company’s Alison Cowley pointed out that the pandemic had hit the price of platinum hard, as closures due to pandemic lockdowns had affected the automotive, jewellery and industrial sectors, leading to a lack of demand for the metal.  

She wrote: “Combined autocatalyst demand for platinum, palladium and rhodium fell by 13%, as the first pandemic wave triggered temporary shutdowns at car plants, and consumers deferred new vehicle purchases.”

As the world started to recover from the pandemic, the price of platinum rose again to a more comfortable level. However, although platinum is expected to buck an overall upward trend in the long term, the commodity is poised to post hefty 2021 losses in 2022.

Platinum price history: The last 12 months

How has the price of platinum performed over the course of the past 12 months? While prior performance is no indicator of what will happen in the future, it is still useful to see what has happened if we want to make a platinum price prediction.

When the markets reopened in 2021, an ounce of platinum was worth $1,085.40 in early January. It stayed at this price, roughly speaking, for most of the month, with some brief forays above the $1,100 mark. The price went up even further in February, with a 12-month high reached on 19 February when it climbed to $1,290.60. While this was the pinnacle of its value over the course of the last 12 months, there was still some encouragement, and the price of platinum stayed above the $1,100 mark until 17 June, when it dropped to $1,054.30. The fall in price was caused, at least in part, by semiconductor issues leading to a reduction in demand for the metal. The overall trend was now a downward one and, on 6 August, the price fell below $1,000 an ounce for the first time in 2021 when it dropped to $972.30. While there was a little bit of recovery, the price seemed to stay below $1,000 for September. Most notably, between 13 September and 20 September, the price fell from $955 to $912, a drop of 4.5% over the course of a week. There was some encouragement, though, and there was an early morning high of $1,000.30 on 27 September.

By 10 December, platinum was trading at $943.34 an ounce and saw little activity over the next few weeks. January 19 opened at $976.49, but the price has hiked $1,033.29 over the course of a few hours, an increase of around 5.8% throughout the day. With rising demand to offset supply surplus, can we make a platinum price forecast for 2022 and beyond? 

 

Platinum price forecast

LongForecast suggests a forecast for 2022 suggests a January close of around $1,042; and closing February around $1,056. In 2023 the commodity should see closing highs of $1,206 in December. The platinum price forecast for 2025 suggests the price should close at $1,191 in January. 

Meanwhile, CoinPriceForecast said that the metal should hit a mid-year target of $1,090; and a year-end target of $1,092. The site’s platinum price prediction says it will get to $1,320 as a year-end projection for 2023. The following year 2024, should end with platinum worth $1,453. The platinum price forecast for 2025 year-end is $1,674 and 2026 at $2,000.  Finally, the site says the platinum price prediction for 2030’s year-end target will be an optimistic $2,854.

Last but not least, Wallet Investor has a bullish sentiment with a platinum forecast which says it will be worth $1,049.64 in a year and $1,365.31 in five years. 

FAQs

It is hard to know whether it is overvalued or undervalued. On one hand, it is has been on a downward trend over 2021. On the other hand, the longer-term forecasts are positive and encouraging. This is one case where you should do your own research before making a decision as to whether to invest in platinum or not.

It might. However, the question is how much it will go up and how quickly. You will need to do your own research. Remember, prices can go down as well as up, and never invest more money than you can afford to lose.

Potentially. The longer-term forecasts for the metal are encouraging, but forecasts are very often wrong. As ever, you will need to look into things yourself before deciding whether or not to invest in the precious metal.

Platinum
Daily change
891.56
Min.: 866.4
Max.: 887.73
Aberdeen Standard Physical Platinum Shares ETF
Daily change
84.75
Min.: 83.37
Max.: 85.55

Further reading

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