Platinum and silver have overshadowed gold

Against the backdrop of continued investor favor for gold, white precious metals such as platinum and silver have recently emerged as a focus of market attention.

According to news from the Chase Wind Trading Desk, a UBS research report on June 9 indicated that platinum prices have already surpassed their target for the end of 2025 and are approaching next year's price expectations; silver has reached a 13-year high, with the gold-silver ratio dropping to around 90. UBS maintains its fundamental judgment that silver and platinum will outperform gold this year.

UBS emphasized that the implied volatility of platinum and silver has recently risen significantly, while gold's volatility has remained almost unchanged. The futures open interest and trading volume of both metals have increased, indicating that investor interest is heating up.

In light of the recent strong performance of platinum and silver, UBS summarized five common factors:

• The market supply gap is expected to fundamentally support prices;
• The relative value attractiveness compared to gold has emerged after previous underperformance;
• Investor positions are relatively light;
• Technical breakthroughs at key resistance levels;
• And the relatively thin liquidity in the gold market makes price fluctuations easier to amplify.

Platinum Breaks Through Range Fluctuations, Market Tension Signals Emerge

The research report pointed out that for a long time, although investors were optimistic about platinum, they have always struggled to find a suitable entry point. The market generally expects platinum to experience shortages due to limited supply, but this usually means that prices will rise gradually, which does not match investors' shorter investment cycles.

However, this time the situation is different. The report highlighted two key new changes:

• Clear signals of tightening market supply: Since the beginning of this year, the forward market for platinum has been in a state of spot premium, a sign that has emerged since the end of 2024, indicating that spot supply is very tight. Although the market tension for gold and silver has eased somewhat after tariff exemptions were confirmed, the tightness in platinum continues.

• Expectations of a recovery in Chinese jewelry demand: Behind the tightness in platinum spot is the possibility that the metal is flowing into the Chinese market. Since platinum prices are far lower than gold, it has a significant cost advantage in jewelry manufacturing. There are signs in the market that Chinese jewelry manufacturers are actively promoting platinum products. The substantial increase in China's platinum imports in April has become one of the catalysts for igniting market optimism and the price increase at the end of May

At the same time, UBS emphasized that the platinum price has broken through the key technical level of $1,100, short-covering, and the thinner liquidity compared to the gold market have amplified the recent price volatility of platinum. Data shows that since mid-May, global platinum ETF holdings have increased by about 4%.

However, the report also highlighted risks: Although the single-month import data in April was impressive, it still showed a slight decline compared to last year, and a single data point cannot constitute a trend. The import data in the coming months will be key to determining whether the demand for platinum jewelry has truly recovered.

In addition, considering the historical preference of Chinese consumers for gold jewelry, the sustainability of this trend still requires more data verification.

Silver Hits 13-Year High, Systematic Funds Pour In

UBS stated that silver has finally welcomed its moment in the spotlight, with prices soaring above $36, reaching a 13-year high, and its increase has recently outpaced that of gold.

The strong performance of silver is attributed to multiple factors.

• First, the rebound in base metal prices in early June provided support for silver, which has industrial properties.
• Second, similar to platinum, the breakthrough of silver prices at key technical levels attracted a large influx of systematic and momentum trading funds. Silver ETFs have risen 4% year-to-date, although net speculative positions have increased in recent weeks, they remain well below peak levels.

Additionally, the gold-silver ratio has significantly decreased to around 90 times, but it is still notably higher than the historical average of 68 times.

The report specifically mentioned the potential impact of the Chinese market on silver. Currently, China remains a net exporter of silver. It is worth noting that when silver surged to nearly $50 in 2011, part of the driving force came from retail demand in China.

UBS believes that silver still has further upside potential, especially as expectations for Federal Reserve interest rate cuts approach. Moreover, if China's retail demand for gold spills over into the silver market, it will further support silver price performance