Platinum Gold Ratio at Record Highs: A Contrarian Opportunity
Platinum is quietly making headlines again, not just for its industrial importance. The Gold Platinum ratio has recently hit multi-decade highs, reaching 3.5. This means that platinum is historically undervalued relative to gold since one ounce of gold is worth 3.5 times the price of one ounce of platinum. This may be one of those rare moments where contrarians see opportunity.
While gold and silver dominate headlines, platinum is quietly carving out its place as a high-potential asset. Here's why:
Platinum Supply Deficits
According to the World Platinum Investment Council (WPIC), falling platinum group metals (PGMs) prices have resulted in persistent supply shortfalls in recent years. South Africa, which accounts for a little over 70% of global production, has seen mining companies reduce their workforce due to the pressure of weak prices on margins.
However, the WPIC fears these job cuts could have detrimental long-term consequences that could erode South Africa’s production capacity. The Council warns that without careful management, the platinum mining sector could face a more profound supply crisis in the future.
Years of under-investment in new South African mines have also constrained platinum production. New mining production is a significant capital investment and a long-term commitment, potentially taking more than 10 years to bring online.
The Council has forecasted a continuation of 2024 trends that could result in a third year of platinum deficits in 2025.
Rising Platinum Demand
Demand for platinum is rising on multiple fronts.
Automotive Sector
Platinum is essential to reducing vehicle emissions, especially in an increasingly strict global emission regulatory environment. Automotive demand for platinum is the single largest demand segment for platinum, accounting for up to 42% of total demand in the last five years.
Despite the ongoing electrification of transport, autocatalyst demand for platinum is expected to grow well into the decade, predicated on the need for more platinum per vehicle to achieve lower emissions requirements.
An autocatalyst with a precious metal-coated ceramic substrate
Green Hydrogen Economy
The urgency to reduce carbon emissions has never been greater, and platinum-based technologies are poised to play a vital role in advancing the energy transition.
Proton exchange membrane (PEM) technology relies on platinum catalysts for two primary uses: electrolysers and hydrogen (H₂) fuel cells, which generate electricity. One of the main markets for hydrogen fuel cells is fuel cell electric vehicles (FCEVs).
Additionally, carbon-free green hydrogen produced from electrolysers can be used in a wide range of applications to replace fossil fuels – power generation, heating, steel making and as a sustainable aviation fuel.
WPIC research indicates that more than US$ 300 billion is allocated for hydrogen investments through to 2030. The Council estimates that hydrogen demand could rise seven times by 2050 with electrolysis accounting for two-thirds of production.
Myriad Industrial Uses
According to the WPIC, industrial demand for platinum has grown at 1.3 times the pace of global GDP since 2013.
With exceptional resistance to corrosion, thermal stability and high melting point, platinum is essential to the glass manufacturing industry, allowing it to endure extreme temperatures without warping or introducing impurities. It plays a key role in the production of items like LED screens and glass fiber.
Platinum is widely used in both established and emerging medical treatments thanks to its biocompatibility and the body’s ability to tolerate it. Platinum-based compounds are commonly employed in cancer therapies, and platinum electrodes are a key component in pacemakers. In addition, platinum's uses in medical applications also extend to the manufacturing of catheters, glucose monitors, cardiac and Cochlear implants.
Platinum catalysts are used to make nitric acid for fertilizers in the agrochemicals sector and to achieve a greater yield of high-octane fuel per barrel of oil in the petrochemical industry. WPIC estimates that the global nitric acid market is currently around US$22.3 billion and is forecast to reach US$27.5 billion by 2025.
Jewellery and Investment Demand
Platinum is a popular jewellery metal as it is hypoallergenic and resists tarnishing. It is often associated with love because of its endurance and strength. Global platinum jewellery demand increased 8% year-on-year in 2024.
Investment demand for platinum in Europe and China rose by 34% and 24% year-on-year in 2024. China’s burgeoning interest in platinum as an investment asset undoubtedly led to the platinum Panda coin being reintroduced in 2022, after a 17-year hiatus.
Fractional Ownership With S.T.A.R. Platinum Grams
Besides buying bullion bars and coins, you can also invest in platinum with S.T.A.R. Platinum Grams, which offers greater cost-efficiency.
Here’s why it stands out:
✅ Buy as little as 0.5 grams – perfect for incremental accumulation or diversification
✅ Low premium of just 3.5% over spot – lower than even the large 50 oz platinum bars, which usually carry ~6.1% premium
✅ Fully allocated and insured – Platinum Grams are fully backed by fully insured platinum bullion that is securely vaulted in our vault, The Safe House. A 0.35% annual storage fee (minimum 0.1 grams per year) applies.
✅ Fractional ownership – the title to allocated platinum bullion backing purchased Platinum Grams vests in the owner at all times and are not on Silver Bullion’s balance sheet
✅ Flexible liquidity – sell back anytime through our S.T.A.R. platform at the prevailing platinum spot price
✅ Physical conversion option – option to convert to a .9995 fine bullion (LBMA/Ex-LBMA refiners) at Tier 5 prices
✅ GST/VAT-exempt
With S.T.A.R. Grams, you're not constrained to buy in fixed weights. Instead, you enjoy the bulk pricing of institutional-sized bars, with the flexibility of fractional ownership.
Platinum: A Contrarian Play with Potential
The Gold Platinum ratio is flashing one of its strongest value signals in decades. Historically, such deep discounts have preceded significant reversals. Prices may not stay this low for long as the market catches on to platinum’s consecutive annual deficits and strategic importance in both industry and clean energy.
S.T.A.R. Platinum Grams offer a compelling way to position yourself in this undervalued metal, efficiently and affordably. Apply for an S.T.A.R. account online and fund your account to start investing in platinum with Platinum Grams.