During a recent session at the 2026 Shanghai Platinum Week event, the discussion on the outlook for platinum group metals (PGM) prices became a central point of focus. Industry experts, including Xunyuan Hu, Head of Precious Metals Research at Citigroup, Nicky Shiels, Chief Researcher at MKS Pamp Group, and Adrian Hammond, Executive Director at Standard Bank SBG Securities, systematically analyzed the underlying drivers of the recent significant price volatility in platinum. They offered their respective analyses and forecasts from multiple perspectives, including geopolitics, the macro environment, and industry fundamentals.
Analyzing the Market Shift
Over the past year, platinum prices have experienced a rollercoaster of significant fluctuations. For several years prior, the U.S. dollar-denominated price of platinum had been consolidating around $1,000 per ounce. After May of last year, a new bull market commenced, driving the price from below $1,000 per ounce to a peak of $2,800 per ounce earlier this year, before subsequently retreating to around $1,600 per ounce.
Regarding this, Xunyuan Hu stated that the fundamental drivers of this market cycle stem from multiple sources. Reviewing 2025, he characterized it as a year where bullish factors for the platinum market were highly concentrated. Prior to May, market focus was primarily on supply-demand fundamentals, such as mining disruptions, power rationing in South Africa, and the impact of electric vehicle penetration on demand for automotive catalysts. However, starting in May, the pricing dynamic shifted. Hu outlined a series of subsequent bullish catalysts: growth in Chinese jewelry demand, increased platinum investment demand, expectations for the implementation of U.S. Section 232 tariffs, a surge in lease rates to historical highs, the Federal Reserve's interest rate cut in September, and news in December that the European Commission planned to delay the phase-out timeline for internal combustion engine vehicles. "It could be said that bullish factors for platinum group metals emerged intensively in 2025. These factors overlapped and resonated, driving the price sharply higher," Hu summarized.
Nicky Shiels provided supplementary analysis from a geopolitical perspective. She noted that around the U.S. Independence Day period in 2025, trade policy uncertainty peaked, leading to a significant increase in PGM price volatility and continued inventory builds. She indicated that not only did COMEX inventories rise, but platinum and palladium futures inventories on the Guangzhou Futures Exchange were also affected by the transmission of geopolitical factors. In her view, the global PGM market is currently moving towards fragmentation, with regional supply-demand imbalances and regional pricing becoming increasingly prominent.
Entering 2026, the market logic has already switched. Hu believes that platinum's own fundamentals have a significantly diminished role in pushing prices this year. The price is now moving more in tandem with other precious metals like gold, but the core logic remains unchanged—investor positioning continues to dominate the market trend. He supported this view with data: even though most supply-demand models indicate an approximate 300,000-ounce supply deficit in the platinum market for 2026, global ETF net outflows from January to date have already exceeded 500,000 ounces, sufficient to offset the full-year supply deficit. This fully demonstrates that investors still wield enormous influence over the price.
Future Outlook: A Turning Point May Be Approaching
Regarding the future trajectory of platinum group metals, the participating experts generally maintained a positive and optimistic stance.
"Current oil prices have retreated from around $120 per barrel to near $70 per barrel. Although inflation data itself is lagging, it is highly likely to trend lower in the next month or two. This will alleviate policy pressure on the Federal Reserve, pushing the U.S. dollar weaker and real interest rates lower. A turning point for precious metals prices may emerge from this," said Hu.
Nicky Shiels analyzed the situation from a historical perspective. She noted that before 2014, platinum consistently maintained a premium of about $200 per ounce over gold, but has since maintained a discount of about $900 per ounce for an extended period. Platinum can currently be described as being in a state of a "distressed asset." She advised market participants to focus on indicators more effective than traditional supply-demand metrics, such as lease rates, the price spread between sponge platinum and platinum ingots, regional premiums/discounts, hedging fund flows, and trade flows. These indicators can more sensitively capture changes in the market's microstructure.
"The global market is moving towards regional fragmentation. Influenced by trade policies, supply-demand structures, and capital flows, different regions are forming their own price systems," Shiels said. She recommended that market participants adopt regionalized allocation and strategic hedging, rather than relying on traditional global unified pricing thinking to manage risk.
Although the experts were generally positive on the future price trend for platinum, they also highlighted key risks facing the market.
On one hand, tariff policy uncertainty persists. Adrian Hammond stated that under the threat of U.S. Section 232 tariffs, a significant amount of physical metal was drawn into the United States last year, leading to a drying up of global liquidity, which was a major driver of the sharp rise in platinum prices. However, the situation has reversed this year—COMEX inventories have declined, lease rates have fallen, and market concerns over tariffs have noticeably cooled. If tariffs are ultimately reduced to zero, the PGM stockpiled in the U.S. could re-enter the global market, exerting downward pressure on prices.
On the other hand, the macro transmission chain remains variable. Xunyuan Hu noted that this year, precious metals prices have returned to a negative correlation framework tied to real interest rates and the U.S. dollar index. The transmission logic is as follows: the U.S.-Israel-Iran conflict pushes oil prices higher; changes in oil prices are reflected in inflation expectations, forcing the Federal Reserve to maintain a relatively hawkish stance; this in turn pushes the U.S. dollar index and real interest rates higher, ultimately suppressing precious metals prices. Any link in this transmission chain experiencing unexpected changes could trigger significant market volatility.
Comments