Platinum Surges to Record High as Supply Crunch and Policy Shift Drive Historic Rally

Platinum prices soared to a record high on Friday, marking one of the strongest rallies in the metal’s history as a combination of supply constraints, shifting investor sentiment, and an unexpected European Union policy reversal fuelled demand. Spot platinum jumped 8% to reach an all-time high of $2,413.62 per ounce by 0304 GMT, putting the precious metal firmly on track for its biggest annual gain ever.

The rally has been driven largely by tightening supply conditions. Major platinum-producing regions, particularly South Africa, continue to face structural challenges including power shortages, rising production costs, and operational disruptions at mines. These issues have significantly reduced output, creating a supply deficit at a time when demand remains resilient across industrial, automotive, and investment sectors. As a result, the platinum market has become increasingly sensitive to any demand-side catalyst.

One such catalyst emerged unexpectedly from Europe. The European Union signaled a policy U-turn on its proposed 2035 ban on new combustion-engine vehicles, opening the door to continued production of hybrid and certain internal combustion engine models. This shift has boosted expectations for sustained demand for platinum, which is widely used in catalytic converters to reduce vehicle emissions. The policy adjustment surprised markets and prompted a rapid reassessment of long-term platinum demand, adding fresh momentum to prices.

Investor flows have also played a key role in platinum’s surge. With gold prices facing pressure from rising bond yields and changing interest rate expectations, some investors have rotated out of gold and into alternative precious metals offering stronger upside potential. Platinum, which had lagged gold for much of the past decade, has emerged as an attractive value play amid tightening fundamentals and improving demand prospects.

The sharp rise in platinum prices underscores a broader shift in the precious metals landscape, where industrial usage, policy decisions, and supply risks are increasingly influencing market dynamics. As supply constraints persist and investor interest grows, analysts expect platinum volatility to remain elevated, with prices likely to stay supported in the near term.