Platinum bull ran to fade, price to fall back in trading range- Goldman Sachs

Goldman Sachs analysts predict a pullback in platinum prices, despite a recent surge to a four-year high driven by expectations of tighter supplies, as they believe the breakout above the $800-$1,150/oz range is unsustainable. The analysts cite slowing Chinese demand for platinum jewelry and reduced automotive demand due to the shift towards electric vehicles, coupled with expectations of stable to moderately higher platinum supplies from South Africa, which accounts for 70% of global production, as key factors driving their bearish outlook.

Analysis

Platinum prices recently surged to an over four-year high, approaching $1,280 per ounce, breaking out of a decade-long trading range of $800 to $1,150 per ounce, spurred by expectations of tighter supplies and robust demand. However, Goldman Sachs (GS) analysts anticipate this breakout will be temporary, forecasting a retreat back into the established range. This bearish outlook is underpinned by expectations of slowing Chinese demand, a critical component of global platinum consumption, with GS noting a cooling in Chinese platinum jewelry purchases since April due to higher prices and anticipated slower withdrawals from the Shanghai Gold Exchange. Concurrently, platinum demand from the automotive sector is expected to soften, largely driven by the global pivot towards electric vehicles, particularly in China, as EVs do not utilize platinum for emissions control. On the supply side, GS projects stable to moderately higher global platinum supplies, with South African output, which constitutes about 70% of global production, expected to increase moderately, aligning with guidance from major PGM miners. This anticipated supply scenario is likely to keep markets adequately supplied, thereby capping significant upward price potential. Despite this cautious forecast, platinum has demonstrated strong performance, with prices up 37.3% year-to-date in 2025, outpacing gold's 28.6% gain.

Key Decisions for Investors

• Given Goldman Sachs' projection of a short-lived price breakout and a potential reversion to the $800-$1,150/oz range, investors might consider evaluating current platinum holdings in light of recent substantial gains and the risk of a pullback.
• Investors should closely monitor key fundamental drivers, including Chinese platinum demand indicators such as jewelry sales and Shanghai Gold Exchange withdrawals, alongside South African PGM production updates, as these will be critical in validating or refuting the bearish thesis.
• The ongoing global transition towards electric vehicles represents a significant long-term structural headwind for platinum demand from the automotive catalytic converter sector, which should be factored into any long-term investment strategies for the metal.