Market Insights

Why Platinum Is So Cheap Right Now – Platinum Spot Price and History Analysis

Gold Alliance disclaimer
Platinum prices might soar and the price of platinum could perhaps hit $3,000 an ounce.

Last updated: 9/22/2022

Why is platinum so cheap now? Will platinum increase in value? Platinum has been known as an option for people that want to acquire precious metals but it’s far from its record high. It may surprise you to hear that many financial experts think it’s likely that the platinum price could soon soar and hit a new all-time high. This article will explain everything that’s been going on with platinum price in recent years and we’ll use history to consider future possibilities. 

In this article, we’ll go over the factors that can make the price of platinum rise, the historical triggers of what has caused platinum prices to rise, and what will platinum be worth in 2022, and what is the future price of platinum. 

The current price of platinum per ounce and its recent history 

At the time this article was last updated, the current price of platinum is $914.96 (+0.004%) an ounce. Note: you can also view our live ounce of platinum price update ticker at the top of every page on our website. 

The first way to answer the question, will platinum hit $5000 an ounce, is to look at the current price of platinum compared to its price in current history. Platinum’s current price is under half of its all-time high of $2,276.00 in 2008. Right now, platinum prices are considerably low. However, if you look at the last 5 years, you’ll see that platinum has sustained its value, with occasional peaks and valleys.

Why is platinum cheap now?

The price of platinum dropped 30% as a result of the 2014 Volkswagen diesel scandal – 40% of the annual end-use of the metal comes from autocatalysts, where it’s used to reduce harmful emissions from diesel engines. Experts predict that platinum prices have since stabilized and are steadily recovering.

Palladium Wholesalers struggle to meet demand

“The stark contrast between palladium’s strong fundamentals and platinum’s lackluster ones continued last year and into coming years, such a divergent trend [has] fueled a marked contrast between investor sentiment,”

Platinum & Palladium Focus from specialist analysts Metals Focus

says the new Platinum & Palladium Focus from specialist analysts Metals Focus. The report was recently launched in London, UK, as part of the annual Platinum Week industry meetings and events.

Stockpiles of palladium have been shrinking for the past seven years in a row. Recent years ended with 16 months’ fabrication demand available, compared to 25 months at the start of the decade. Meanwhile, platinum stockpiles have barely changed since 2013, at around 13 months of demand.

Metals Focus predicts that platinum production will drop 1% per year, which would be the third annual drop, and land it 7% below 2011’s peak at 188 tons. However, at 247 tons total supply is forecast to be 1% higher than previous years due to the recycling of autocatalysts (40 tons), jewelry holding (17 tons), and e-scrap (2 tons). Industry-use, investment, and jewelry demand in came in at 249 tons.

“The platinum market was effectively balanced last year,” says Metals Focus, who predicts that supply will exceed demand by just 1.2 tons, which is “broadly unchanged” from recent years.

Will platinum demand drop if the platinum price per ounce rises?

Refining and technology firm Johnson Matthey, however, forecasts that the surplus will be close to eight times higher. Global demand for platinum autocatalysts, they say, will drop 3% because the amount used in each catalyst will drop with the shift to selective catalytic reduction (SCR), a technology that reduces emissions of poisonous nitrogen oxide.

According to bullion market-makers ICBC Standard Bank, “under the current direction of technological travel, [platinum-bearing] Lean NOx Traps look increasingly unlikely to be the solution of choice for NOx reduction. This removes the potential for a significant demand kicker on account of increased loadings.”

In addition, the falling European demand for diesel cars will “outweigh” growth in heavy-truck demand in the US and China, says ICBC analyst Marcus Garvey.

5 Reasons prices for an ounce of platinum may increase

“But, crucially, mined supply is forecast to decline by 6%, with the potential for more significant reductions in South African production [where] more dramatic restructuring is [also] possible” from the potential sale of the third-largest producer Lonmin to Sibanye-Stillwater and from a review of projects by the second-largest miner, Impala.

1. The Supply of Platinum is Down 

If we look at how much platinum was mined over the last 11 years, we can see that the supply of platinum is decreasing. In recent years, only 180 metric tons of platinum were mined, that’s nearly a 10% drop in mining production compared to the peak (over the last 11 years).

The platinum supply has flattened but demand might increase, which would cause the price of platinum to rise.

2. The auto industry has a high demand for platinum 

The vehicle shortage can be felt across the country. When the chip shortage is over, automotive dealers will be scrambling to make enough cars to meet the demand, and one of the things they when manufacturing new vehicles is platinum. Platinum is a massive component in catalytic converters, and is essential to building new vehicles. The potential demand for more platinum from the auto industry could bring the price of platinum to new highs. 

3. Medical uses for platinum could increase the demand for the precious metal 

You probably already know that precious metals are in high demand in various industries. However, when considering will platinum hit $5000 an ounce, its important to understand what makes it particularly unique from other precious metals. One quality is that platinum is also a biocompatible metal, which means it rarely causes massive reactions when used in permanent medical applications such as pacemakers as well we surgical equipment. As the Baby Boomer generation reaches its golden years, this could boost the need for platinum in the medical field.  

4. Platinum is used in technology 

More and more tech companies are using platinum in liquid crystal displays. The precious metal also can increase storage density in servers that are used for cloud storage. The technological applications for platinum are increasing, and could increase the demand for platinum, which could lead to the price of platinum skyrocketing sooner rather than later.  

5. Rising inflation in the United States could be a sign that precious metals prices are increasing.  

Inflation can contribute to the rise in value and pricing for precious metals like platinum. As the demand for platinum grows, the intrinsic value of the precious metal could grow with it, and fast. Meaning, it becomes more and more difficult for inflation to hurt the value of platinum. It can, in effect, become a store of wealth during inflationary times.  

How long would it take for the ounce of platinum price and value to increase?  

The most likely way platinum will increase in value is from a massive surge in demand from the electric car industry’s expansion over the next 10 years. While we cannot predict the future, we can consider all we’ve learned thus far.  

Let’s look at some key factors that need to take place for this to happen:

1 – The low price of platinum drives it to become a more attractive option for industrial use.

2 – The production of platinum stays low due to its rarity, causing supply to lag behind new demand.

3 – High US inflation causes the price of platinum to scale upward and becomes attractive for people seeking precious metals with high-growth opportunities.

What is the best way to learn more about platinum? 

Do you want to know more about how you can acquire platinum for your savings? Contact our team today. They are standing by to assist you in acquiring platinum for your Precious Metals IRA or direct purchase. Call us today at (888) 734-7453, and don’t forget to ask about our Inflation Survival Guide to help you determine if precious metals are the right asset for you. 

Like this article? Feel free to share it with the buttons below!

Start your journey with Gold Alliance today.

Learn everything you need to know about owning gold and how Gold Alliance can help.