Platinum prices soared above $1,400 per troy ounce for the first time since 2014. This represents a surge of approximately 40%, or about $400, in just six weeks.

Reports suggest increased demand for Platinum jewellery in China, as Gold has become more expensive. In May, Chinese Platinum imports reached their highest since April 2024, raising concerns about possible market overheating without a clear fundamental trigger.

Despite a persistent supply deficit, Platinum prices remained unaffected in recent years. At the end of 2023, prices briefly dipped below $900 per troy ounce even amidst a supply shortage, as reported by the World Platinum Investment Council.

The current price increase may be linked to the high discount compared to Gold, which is viewed as pricey. Coincidentally, the Gold market struggles as speculation on US interest rate cuts rises.

This recent spike in platinum prices – breaking past $1,400 per troy ounce and climbing nearly 40% in a little over a month – is particularly sharp given the metal’s muted reaction to supply imbalances in previous years. In simpler terms, although there’s been a clear shortage, prices haven’t shown much enthusiasm until now. Late last year, for instance, the market dipped below $900 per ounce, even though less metal was making it to consumers. So, when platinum surges in this way, without a single strong catalyst, it raises several eyebrows.

Rising imports into China, specifically for jewellery demand, have added weight to the sharp move upwards. Gold’s price is making it less appealing for buyers seeking less expensive alternatives. As a result, demand for platinum jewellery has risen – particularly in Asia – and the import figures from May strongly support this narrative. However, while import volumes can drive price, a fast uptick, especially of this size, without matching physical market tightness, often leads to exaggerated swings that later reverse when speculative pressures ease.

What’s even more important is the broader comparative value. At the moment, platinum trades at a large discount to gold. This has caught the attention of many who see it as undervalued. That said, the relative movement – especially given the speculation around interest rate policy in the US – matters just as much. With rate cut expectations weighing on gold’s performance, we’ve seen capital shifting in search of value elsewhere, and platinum, still relatively inexpensive, is temporarily benefiting.

From where we stand, the price action doesn’t appear to be grounded in new supply or industrial shifts. When price jumps like this happen without corresponding structural change, it sends a strong signal – not of a transforming metal market, but of short-term positioning.

It’s not just jewellery driving moves; speculative buying has undoubtedly entered the fray. This creates an environment where price moves begin to feed into themselves. Traders chase the strength of moves rather than underlying logic. The question, then, isn’t whether platinum is in demand, but whether current buying can continue without fresh demand appearing.

Hedging strategies should now be cross-examined based on position maturity and exposure to volatility shocks. Volatility has picked up, but at these levels, it might take only a small shift in sentiment to unwind positions that were entered with poor downside planning. Positions built on short-term momentum – especially those without an industrial catalyst to lean against – attract short-term capital, and short-term capital can leave just as quickly.

Be particularly attentive to correlations, especially with gold and palladium. These relationships are historically tight, but current spreads are wide enough to invite arbitrage strategies. That introduces pressure from a different angle – the pressure of cross-commodity rebalancing.

Technical levels will remain useful, mostly because speculative participants often rely on patterns to guide decisions. If support levels near $1,350 are tested without fresh buying stepping in, then a quick reset lower could unfold. But it’s what doesn’t appear on the charts – physical flows, trade finance conditions, and margin call risk – that may ultimately drive the next sharp move.

Keep in mind that we’ve seen this type of exaggerated enthusiasm before, and more often than not, it doesn’t end with a slow fade, but with a fast reversal.