Platinum ETFs Outshining Gold & Silver in 1H2025: Here's Why

Platinum ETFs are significantly outperforming gold and silver in 1H2025, with the abrdn Physical Platinum Shares ETF (PPLT) up 40% YTD, driven by strong industrial demand, supply constraints, and clean energy adoption. The platinum market faces a projected 966 koz deficit in 2025, with supply expected to decline 4% to a five-year low, while demand remains robust due to automotive use, increased jewelry demand in China as a substitute for gold, and growing applications in the hydrogen economy. Platinum is currently viewed as an attractive entry point compared to gold and silver, with above-ground stocks declining and signaling tightening availability.

Analysis

Platinum is demonstrating significant outperformance relative to other precious metals in the first half of 2025, with the abrdn Physical Platinum Shares ETF (PPLT) appreciating 40% year-to-date, markedly outpacing the sub-30% returns of SPDR Gold Shares (GLD) and iShares Silver Trust (SLV). This rally has notably accelerated, with platinum surging 30% in the past month alone. The metal's strength is underpinned by a confluence of robust industrial demand, persistent supply constraints—primarily from South Africa, which contributes about 80% of global production and is impeded by aging infrastructure and operational disruptions—and its increasing role in clean energy applications. The World Platinum Investment Council (WPIC) projects a substantial supply deficit of 966 koz for 2025, the third consecutive annual shortfall, with total supply forecast to decrease by 4% year-over-year to 6,999 koz, a five-year low. While overall demand is anticipated to decline by 4% to 7,965 koz in 2025, key segments exhibit strength: global jewellery demand is expected to rise by 5%, particularly in China as consumers seek alternatives to high-priced gold; automotive demand is forecast for only a modest 2% decline to 3,052 koz, supported by slower EV adoption and stricter emissions standards like Europe's Euro 7; and investment demand remains robust at a projected 688 koz. Furthermore, platinum demand is soaring in the burgeoning hydrogen economy. The market's tightening fundamentals are highlighted by a projected 31% decline in above-ground stocks to 2,160 koz by year-end 2025, equating to just three months of demand coverage. Valuation metrics also favor platinum; historically trading at a discount to gold, the gold-to-platinum ratio, which reached 3.5 in May 2025, has since narrowed to 2.7. Despite reaching a four-year high, platinum remains significantly below its 2008 all-time peak, suggesting it may be undervalued compared to gold and silver, which are perceived by some as "overbought."

Key Decisions for Investors

• Investors should evaluate the compelling bullish case for platinum, driven by a persistent supply deficit, multifaceted demand from industrial, automotive, jewellery, and clean energy sectors, and its current relative undervaluation against gold.
• Consider gaining or increasing exposure to platinum, potentially through ETFs such as PPLT, which has exhibited strong outperformance in 1H2025, as a strategic alternative to gold and silver which appear to be trading at elevated levels.
• It is prudent to monitor key variables such as the stability of platinum production from South Africa, the growth trajectory of the hydrogen economy which significantly impacts industrial demand, and the gold-to-platinum ratio for further signs of valuation normalization.