Platinum’s Bullish Surge Faces Potential Corrections, ANZ Warns

ANZ analysts caution that platinum’s extraordinary 43% rally since mid-May might face imminent corrections, despite it reaching an 11-year high. This warning indicates that gains might be excessive, even as structural supply issues persist.

Drivers Behind Platinum’s Price Rise

Recent price spikes in platinum result from:

• A positive industry outlook.

• Speculative interest due to fears of tighter global supply.

• Increased safe-haven investments as alternatives to gold.

• Historically lower prices compared to gold attracting value investors.

The current spot price of platinum sits at $1,395.92/oz, having crossed the $1,400/oz threshold in June.

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ANZ’s Caution: Demand Side Factors To Consider

Despite ongoing supply deficiencies, ANZ points out potential demand-side challenges ahead:

• Weakened Chinese imports if price levels remain high.

• Possible declines in the auto sector demand, a significant source for platinum.

• Slowing shifts from palladium to platinum utilization in catalytic converters due to rising expenses.

The bank suggests that platinum could retreat to around $1,250/oz if it struggles to sustain above $1,400, which has posed as a critical resistance point.

Supply Outlook: Constraints Persist

The overarching supply narrative remains tight:

• Disruptions in South African mines are projected to lower global platinum output by 3% in 2025.

• Low rates of platinum recycling are continuing to uphold supply tightness.

Final Thoughts

While platinum’s long-term supply-deficit cycle continues, immediate speculative overreaches and macro demands may lead to short-term retractions. Monitoring price movements near the critical $1,400/oz threshold is essential as traders seek indicators, particularly from Chinese markets and automakers.