Silver, platinum, and other precious metals have collectively surged. What is the market pricing in?
Currently, silver has risen to a 13-year high, and platinum has reached a new high since 2022. Market analysis indicates that this round of price increase is driven by technical momentum and fundamental improvements, with a recovery in platinum demand in China and strong physical demand for silver in India boosting the trend. On the supply and demand side, WPIC data shows that the platinum market is expected to be short by 30 tons, and silver is also facing a supply gap. Coupled with support from industrial demand such as new energy, the long-term trend of precious metals may be boosted
The collective "uprising" of industrial precious metals continues.
On Friday, June 6, spot silver extended its overnight gains, breaking through the $36 mark, reaching its highest level since February 2012, after a 4.5% surge on Thursday. Platinum also surged, rising 1.2% to $1,154.73 per ounce, marking a new high in over two years.
Over the past 12 months leading up to Thursday, silver and platinum have risen by 19% and 13%, respectively.
Driven by improved sentiment across the precious metals sector, gold briefly rose 0.5% to $3,368.79 per ounce, on track for a weekly gain of about 2.4%.
What is the market pricing in with the collective surge of industrial precious metals?
According to Nicky Shiels, head of metal strategy at MKS PAMP SA, this wave of gains is attributed to the technical momentum across the entire metal sector and improving fundamental factors. Strong physical demand for silver in India and a recovery in platinum demand in China have further reinforced this rally.
At the same time, silver and platinum are undergoing technical catch-up.
Silver and platinum typically trade in sync with gold, which is viewed as a traditional safe-haven asset during periods of geopolitical uncertainty. Over the past 12 months, benefiting from the escalation of the U.S.-led tariff war and continued large-scale gold purchases by central banks, gold has surged by 42%. In contrast, silver has risen by about 15%, significantly lagging behind.
Supply-demand imbalance to persist, industrial demand supports long-term trends
Although silver and platinum have lagged behind the more expensive gold in terms of gains, they hold significant value in the industrial sector.
The rise in silver and platinum is closely related to industrial demand. Silver is a key material for solar panels, while platinum is widely used in automotive catalytic converters and laboratory equipment.
According to data from the World Platinum Investment Council (WPIC), the platinum market is expected to face a shortage of 30 tons by 2025, while the silver market is also facing supply shortages. Bloomberg reports that both precious metal markets will face supply shortages this year, continuing the trend of demand exceeding supply seen in recent years.
Investor interest returns, ETF holdings significantly increase
Analyst Shiels from investment firm MKS PAMP stated that if silver can remain steadily above the "key inflection point" of $35, it should reignite the interest of retail investors who have been temporarily on the sidelines. Meanwhile, a potential recovery in demand for platinum-backed ETFs could lead to a speculative rebound, as persistently high leasing rates indicate that the market is tightening Data shows that the holdings of platinum ETFs have increased by more than 3% since mid-May. At the same time, the inflow of funds into silver-backed ETFs has continued to grow since February, with holdings rising by nearly 8%
