In the world of metals investing and trading, platinum occupies a place that straddles both precious and industrial metals. On the one hand, it’s used in jewelry such as wedding rings. But a bigger source of demand comes from the automobile industry, as platinum is a key material in catalytic converters for internal combustion engine vehicles.
In recent years, Western automobile manufacturers have scaled back their forecasts for electric vehicle production as drivers worry about range and availability of charging stations, while President Donald Trump has been less supportive of electric vehicles than his predecessor.
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According to Cox Automotive, total U.S. electric vehicle sales in the fourth quarter fell 46% on a quarterly basis and 36% year over year as government-backed sales incentives went away in the beginning of October. Fourth-quarter sales marked the lowest levels since Q4 2022, the automotive services and technology company said.
Here’s what investors should know about the platinum market now:
— Base case for platinum investments.
— Risks of platinum investment.
— Gold’s effect on platinum investment.
— Ways to invest in platinum now.
Base Case for Platinum Investments
Slumping electric vehicle demand in favor of internal combustion engines has been good for platinum, with prices more than double what they were a year ago.
“Platinum prices are telling us that gasoline vehicles will be with us longer than the market expected,” says Jakub Rehor, portfolio manager at Incline Investment Management. “Cheap oil makes gasoline vehicles attractive. We expect many years of cheap oil, and that will help platinum prices.”
Even though platinum isn’t a major part of battery-powered electric vehicles, the metal isn’t totally shut out of the clean energy landscape. It is used as a catalyst in electrolyzers that separate hydrogen from water. When those are powered by renewable energy, they create green hydrogen, which according to the World Platinum Investment Council can be used to replace fossil fuels in automobiles, power generation, heating, fertilizer production, steelmaking and even aviation fuel.
Beyond these broad demand fundamentals, there are also shorter-term issues that can cause platinum, like other commodities, to be volatile.
Risks of Platinum Investment
Most of the world’s platinum comes from South African miners. There, persistent power shortages are one of the challenges that can hamper supply, as are labor relations and increasing operating costs as easier-to-mine ore bodies get used up.
“Where new supply is expected to be commissioned, these are largely replacing depleted operations following prior years of underinvestment,” the World Platinum Investment Council said in November.
The second-biggest producer is Russia, and the European Union is considering banning platinum imports as the war in Ukraine continues to be a central geopolitical issue in 2026.
Gold’s Effect on Platinum Investment
Meanwhile, investment demand has picked up in recent months in a spillover effect from gold’s record price run. Investment demand for precious metals has increased amid the decline in the U.S. dollar and increasing concerns about tariffs and geopolitical uncertainty. Industrial commodities in general are also often seen as inflation hedges because their use tends to increase when the economy is doing well and inflation is on the rise.
“Interest is rising as part of the wider precious metals desire of investors to preserve more of their purchasing power,” says Robert Minter, director of ETF investment strategy at Aberdeen Investments.
Ways to Invest in Platinum Now
Platinum Futures
Speaking of futures, that’s one way traders can gain exposure to the ups and downs in the platinum market. Futures contracts are bought and sold in New York; Tokyo; Johannesburg, South Africa; and Guangzhou, China.
But while futures markets may spring to mind when talking about platinum prices, they’re generally not the best place for everyday investors to put their money. They’re not set-and-forget investments.
“When you own via futures, it can be time-consuming to invest (and) manage changing daily collateral, margin requirements, and manage the roll of expiring contracts into longer-term contracts,” Minter says.
Platinum ETFs
An easier route is through physically backed funds. Investors can consider the Abrdn Physical Platinum Shares ETF (ticker: PPLT), which is the biggest exchange-traded fund, as well as the GraniteShares Platinum Trust (PLTM) and the Sprott Physical Platinum and Palladium Trust (SPPP). These investment vehicles trade on exchanges like stocks, but the shares are backed by actual platinum stored in vaults.
These funds deal with the custodial headaches of storage and insurance that would otherwise have to be borne by individual investors buying platinum bullion themselves. Still, that is an option, as there are metals dealers out there like JM Bullion, Kitco, APMEX and Money Metals that allow you to buy platinum bars and coins. If you go that route, you’ll pay a premium above spot price, in addition to the expenses of storing and insuring your purchases. If you want to sell the metals back to these dealers, they’ll discount it from spot price, further eating into any of your potential profits.
Platinum Mining Stocks
This brings us to another popular method for investing in platinum — mining companies.
Because of operating leverage, mining company stocks can increase more than the price of the metal they produce when prices are rising. But there are also a lot of risks when it comes to investing in mining companies.
“When you own a mining company’s equity, you should earn a levered return of the underlying mine to compensate for the added equity risk of poor management decisions, strikes, accidents, changing global trade patterns,” Minter says.
More established platinum mining companies investors can consider include major player Valterra Platinum Ltd. (OTC: ANGPY) as well as Impala Platinum Holdings Ltd. (OTC: IMPUY) and Sibanye Stillwater Ltd. (SBSW).
George Kailas, CEO of stock- and fund-picking app company Prospero.ai, says SBSW has been showing signs of significant institutional investor buying.
“In the materials space this kind of bullishness is always a reflection of heightened demand and robust demand forecasting,” he says. “Also helping pricing is the supply side has deteriorated significantly.”
Junior Platinum Mining Stocks
While the larger mining companies offer more stability, even if they are still volatile, smaller exploration companies can potentially offer more upside, although they are riskier. These junior platinum mining companies include New Age Metals Inc. (OTC: NMTLF), Platinum Group Metals Ltd. (PLG), Stillwater Critical Minerals Corp. (OTC: PGEZF) and Eastern Platinum Ltd. (OTC: ELRFF).
“When owning miners, keep in mind that many situations can occur that make miners’ prices move oppositely from the metal, such as labor strikes, accidents, increases in local taxes, environmental regulations or poor management decisions,” Minter says. “All of these have occurred over recent years.”
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How to Invest in Platinum as Drivers Put the Brakes on EVs originally appeared on usnews.com
