Platinum Prices Soar to Ten-Year High Amid Trade Tensions
(MENAFN) Platinum prices surged to their highest levels in a decade on Friday, hitting $1,352 per ounce, driven by intense market volatility sparked by escalating trade tensions, geopolitical uncertainty, and growing concerns over the Federal Reserve's policy direction.
This spike marked platinum's peak since September 2014, reflecting an 11-year high and an impressive 43% increase since the beginning of the year. Prices later stabilized around $1,290 per ounce, but the surge is being closely monitored by market experts.
Supply shortages and growing demand were key factors behind the surge. In particular, uncertainties surrounding US President Donald Trump’s tariff plans fueled concerns over global trade, sparking a rush for safe-haven assets like platinum.
Trump's trade actions, especially those designed to “save” the US auto industry through tariffs, have inadvertently boosted demand for both platinum and palladium—critical materials used in the manufacturing of internal combustion engine vehicles.
Silver prices also climbed in response to the tariffs and increasing geopolitical tensions, as US-China trade disputes and the US's reciprocal tariffs continued to impact commodity markets.
Moreover, the tariff concerns spurred a rise in shipments, which contributed to higher freight rates, further intensifying market instability.
One surprising factor driving platinum's demand was the public fallout between Trump and Elon Musk, the world’s wealthiest person. Their social media clashes led to speculation that electric vehicle (EV) incentives could be rolled back, potentially slowing EV adoption and fueling greater reliance on gasoline-powered vehicles, which use platinum in catalytic converters.
Additionally, China’s increased platinum imports in April have added to the price surge, as demand for platinum jewelry remains robust.
Weibin Deng, Asia-Pacific head of the World Platinum Investment Council, explained that platinum's price rise is largely attributed to its relative affordability compared to gold. As gold prices surged due to geopolitical uncertainties, many jewelers have shifted their focus to platinum. Deng also forecasts that platinum jewelry demand will increase by 7% in Europe and 8% in North America this year.
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