The Story
My fascination with platinum began years ago, almost casually, when my uncle once remarked, “Gold gets all the attention, but it’s platinum and diamonds that are truly rare.” That line stayed with me. It resurfaced much later, right before my wedding, while we were deep into jewellery shopping. Somewhere between price tags and purity checks, my investor instincts kicked in and I started comparing gold with platinum, a line of thinking my gold-loving family did not appreciate. But what I discovered was far more interesting than I expected.
Platinum isn’t just another precious metal competing with gold. It belongs to an elite category known as platinum group metals, or PGMs, a family that includes palladium, rhodium, ruthenium, iridium, and osmium. These are among the rarest elements found on Earth, and platinum is their most recognizable member.
What makes it special is not just scarcity. Platinum is incredibly dense and chemically stable. It doesn’t corrode, rust, or tarnish. Air, water, and most acids have no effect on it. Only a rare chemical mixture called aqua regia, which can also dissolve gold, can break it down. Hold a small piece of platinum in your hand and it feels unusually heavy, almost unnatural. That weight comes with a story: scientists believe much of Earth’s platinum arrived via meteorites billions of years ago. In a very literal sense, wearing platinum means wearing something that predates the planet itself.
A Metal That’s Hard to Find and Harder to Make
Platinum’s rarity becomes even more striking when you look at where it comes from. Roughly 70% of the world’s supply is mined from a single geological formation: South Africa’s Bushveld Complex. Miners often call it the “platinum heart of the world.” Russia accounts for another 10–12%, with Zimbabwe and parts of North America making up the rest.
Extracting platinum is a brutal process. For every 10 tonnes of ore pulled out of the ground, miners recover only a few grams of usable metal. From mining to refining, it can take nearly six months to produce just one ounce of pure platinum. Supply, by design, is slow and constrained.
Which brings us to the present moment.
Why Platinum Is Beating Gold
While headlines have been obsessed with gold’s rally, platinum has quietly delivered stronger returns. This year alone, platinum prices are up around 85%, compared to gold’s roughly 52%. To understand why, the explanation comes down to something basic, demand and supply.
On the demand side, two forces stand out.
The first is the automobile industry. Nearly 40% of all platinum produced each year ends up in catalytic converters, the devices inside vehicles that neutralize toxic exhaust gases. Historically, petrol cars relied more on palladium, while diesel vehicles used platinum. But when palladium prices surged beyond $3,000 an ounce in 2022, automakers began switching back to platinum. According to the World Platinum Investment Council, this substitution alone could add nearly 850,000 ounces of demand this year about 12% of global supply.
The second driver is industrial usage. Around 30% of platinum demand comes from industries like chemicals, glassmaking, and medical equipment. A particularly important emerging use is green hydrogen. Platinum acts as a catalyst in electrolyzers that split water into hydrogen and oxygen. As governments invest heavily in hydrogen infrastructure, platinum could become a quiet backbone of the clean energy transition. Jewellery accounts for about a quarter of demand, while investment demand makes up the remainder.
A Supply Story That Keeps Tightening
On the supply side, the problem is simple: the world isn’t producing enough platinum.
South African mines are deep, ageing, and energy-intensive. Frequent power outages have disrupted operations, shut smelters, delayed refining, and even flooded mines. Russia, the second-largest supplier, faces its own constraints including sanctions, export friction, and deteriorating infrastructure.
The result is a growing imbalance. According to industry estimates, the platinum market ran a deficit of nearly one million ounces last year, one of the largest shortfalls on record.
Why Platinum Still Isn’t Gold
At this point, platinum sounds almost too good. But there’s a reason it has never enjoyed gold’s status or stability.
Ask yourself a simple question: why don’t central banks stockpile platinum the way they hoard gold?
The answer lies in trust, not rarity.
Gold has thousands of years of monetary history behind it. Central banks hold gold because it behaves like money, it’s highly liquid, globally standardised, and backed by deep lending and leasing markets. That’s why international reserve systems track currencies and gold, but not platinum. Platinum’s market is tiny by comparison, heavily driven by industrial cycles, and far less liquid. Central banks want assets they can mobilise quickly without disrupting prices and platinum doesn’t offer that.
In fact, platinum, silver, and palladium are not recognised as official monetary reserve assets in the global banking system. They simply don’t meet the criteria central banks look for.
This distinction matters. Gold thrives on psychology, trust, and fear. Platinum thrives on chemistry and industrial demand. When economies slow, psychology wins. That’s why platinum prices collapsed during the 2008 financial crisis and again after the 2015 Dieselgate scandal, which crushed diesel demand in Europe.
History tells the same story repeatedly. Platinum has fallen sharply during most major recessions, while gold tends to rally in those very moments. That cyclicality is why platinum has never attracted sustained investment demand like gold.
So Why Look at Platinum Now?
There’s no simple investment thesis that guarantees success. But commodities move in cycles, and platinum appears to be entering one shaped by underinvestment.
One way to see this is through the capex-to-depreciation ratio, a measure of how much mining companies are reinvesting to replace ageing assets. For platinum miners, this ratio is near multi-decade lows. Supply peaked around 2019 at roughly 8 million ounces and has been declining since. Even if prices rise, new supply will take years to come online.
Yes, electric vehicles could eventually reduce demand for catalytic converters. But internal combustion engines still account for over half of global vehicle sales. Trucks, hybrids, and industrial engines will continue to rely on platinum-based systems for years. Add low inventories, long lead times, and hesitant capital spending, and even small demand shocks can send prices sharply higher.
When mines can’t meet demand, buyers turn to the spot market. Recycling offers some relief, but it’s limited contributing only about 20% of total supply and moving far too slowly to plug large gaps.
What This Means for Indian Investors
For Indian investors, access remains limited. There’s no domestic platinum ETF yet. Options include physical bars or coins from select refiners, or exposure through international ETFs. Physical platinum attracts 3% GST and capital gains tax, making it less tax-efficient than gold but still viable as a diversification tool.
Anyone considering it should expect volatility. EV adoption headlines, industrial slowdowns, and macro shocks can all move prices sharply. But if deficits persist and producers remain cautious on expansion, prices have limited room to fall.
Platinum won’t replace gold in a central bank vault or in your emergency fund. But it does represent a mispriced claim on extreme scarcity combined with industrial relevance.