Platinum price surge: What does this mean for UAE buyers?

Why are platinum prices surging?

1. Chinese demand for affordable alternatives
   Platinum is increasingly seen as a cheaper alternative to gold, especially in the Chinese market, which has boosted demand for platinum jewelry. As Chinese consumers turn to platinum in greater numbers, the physical market for platinum is facing a deficit, driving up its value.

2. Tight supply and global deficit
   The physical platinum market is running at a deficit, exacerbated by a notable outflow of platinum from key trading hubs like Zurich and London. Fears that US tariffs could impact imports early in 2025 have tightened platinum’s availability even further.

3. Mining disruptions in South Africa
   South Africa, the world’s largest platinum producer, has seen a decline in production due to weather disruptions and other challenges. These setbacks in platinum production have helped push the price even higher. Mining companies like Anglo American and Impala Platinum have felt the impact, while investors are capitalizing on the supply crunch.

4. Rising borrowing costs
   The cost of borrowing platinum has also surged, reaching its highest point in two decades. This spike in borrowing costs signals the tightness in the platinum market, further encouraging investors to push prices upwards. Platinum’s forward prices are currently trading at a steep discount compared to the spot price, adding to the sense of a market under strain.

5. EVs and decline of other precious metals
   While platinum remains in demand for jewelry and autocatalysts, the rise of electric vehicles (EVs) has put pressure on the market. EVs don’t use platinum, nor do they rely on palladium or rhodium – metals often used in traditional car catalytic converters. As the automotive industry pivots towards electric, platinum’s future in this sector looks uncertain, but demand for it in jewelry remains strong.

What does this mean for UAE buyers?

• Higher prices for platinum jewellery: As the price of platinum increases, expect higher costs for platinum jewelry in the UAE market. This could be a significant consideration for those looking to buy gifts or investment-grade platinum pieces.

• Investment opportunities: If you’re looking at platinum from an investment perspective, the metal’s price has made considerable gains in 2025. However, as supply continues to be constrained, platinum could remain volatile. For UAE buyers, this presents an opportunity to invest, but also a need to be cautious about potential fluctuations in the short term.

• Supply concerns: Given the disruptions in platinum mining and the ongoing global deficit, the UAE market may see continued price pressure. Buyers looking to invest or purchase platinum may face higher premiums and tighter availability.

• Looking beyond platinum: If you’re an investor concerned about the market's volatility or a buyer looking for more stable options, diversifying into other precious metals like gold or silver might offer a safer alternative in the long term.

Key takeaways for UAE platinum buyers

• Expect higher prices: Platinum prices in the UAE are expected to remain elevated, driven by global shortages and increased demand. If you’re planning to buy platinum jewelry or invest, be prepared for higher costs.

• Look for stability: While platinum has surged in 2025, experts suggest the market may remain tight, but there’s a chance of price fluctuations as supply issues and demand continue to evolve.

• Invest wisely: If you’re looking to invest, platinum’s strong performance this year makes it an attractive option. However, given the supply concerns and the global economic environment, buyers should stay informed and make strategic decisions.