Platinum takes on a new shine as prices soar

Platinum jewellery has been flying off the shelves in the Gulf recently, despite a major jump in the metal’s prices.

Alamy via Reuters | Platinum mining in South Africa. Floods and under-investment in the country have affected global supply

• Interest as alternative to gold

• ‘Lost decade’ in sector investment

• Pivotal role in hydrogen industry

An ounce of platinum cost about $1,400 at the start of this week, a year-on-year increase of around 54 percent.

Sales of platinum jewellery in the GCC are up 25 percent year on year for the first three months 2025, according to figures from marketing organisation Platinum Guild International.

Behind this lies “a quadruple whammy” in global market conditions, according to Henk de Hoop, CEO of critical minerals consultancy SFA Oxford: mismatches in supply and demand have meshed with Donald Trump’s tariffs, South African mining issues and a new-found investor interest in the metal as an alternative to high-priced gold.

Platinum is a key ingredient to a burgeoning industry in the Gulf: hydrogen fuel cells, which are a developing technology that may one day power transport from Neom in Saudi Arabia to Muscat in Oman.

“Overall, platinum plays a pivotal role in the hydrogen fuel story,” Century Financial chief investment officer Vijay Valecha told AGBI. “With Saudi Arabia and the UAE investing billions in hydrogen projects, this could become a significant indirect source of platinum demand.”

Yet if the platinum industry is to meet this potential future demand, it has more immediate hurdles to overcome.

The main source of the world’s platinum is South Africa. It holds around 80 percent of the globe’s total reserves of platinum group metals (PGMs) – a group of six critical minerals that includes palladium and rhodium.

Recent heavy rains in mining areas have caused flooding. At the same time, several key smelters are undergoing major maintenance. “As a result, South African shipments have dropped significantly in the second and third quarters this year,” de Hoop said.

This also highlights a longer term supply problem in the industry.

Prior to 2025, platinum prices had been falling in the expectation of declining demand. This was because platinum, along with palladium and rhodium, are important components in catalytic converters, vital for gasoline fuelled, internal combustion engine (ICE) cars.

With demand for electric vehicles rising, investors calculated that this would cut demand for ICE vehicles and therefore cut demand for PGMs. Platinum prices started falling. Consequently, there has been a lack of investment in platinum mines – a problem that is impacting supply.

“We had a lost decade in investment terms,” de Hoop said. “To bring on a new mine in South Africa, you have to go ever deeper and few have had the budget to do so.”

Meanwhile, the prospective Trump tariffs earlier in the year also had an effect. Fear that these might affect PGM imports to the US led to large quantities of physical platinum shipped into US vaults.

“This resulted in a major collapse in liquidity in the market,” de Hoop said. “There was a panic.”

This jolted prices upwards, as also happened with another flight to safety – gold.

“With gold consolidating after its April record of nearly $3,500 [an ounce], investors began searching for cheaper alternatives,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said.

“What had long been ignored was suddenly rediscovered. Platinum was a hidden gem brought back into focus.”

Demand soared, with this also being fed by growing interest in a relatively new market. “China suddenly woke up,” de Hoop said.

“With the differential to gold, Chinese investors were looking for an alternative, so a large amount of the metal went to China for both jewellery and small bars.”

With all these factors combined, “platinum became one of the most sought-after precious metals of 2025,” Valecha said.

The current supply and demand mismatch comes at a time when the potential uses of platinum and its mining bi-products, such as nickel and iridium, are increasing.

The Gulf is also a major testing ground for these new uses, particularly those associated with hydrogen.

As just a few examples, Oman opened its first hydrogen fuel cell station in February, while three months later US company RONN signed a $4 billion Saudi deal for plants building hydrogen electric logistics trucks and SUVs. The UAE has also been at the forefront of fuel cell research, while the giant Kezad A facility in Abu Dhabi will be the region’s largest hydrogen manufacturing plant.

“You have hydrogen projects in Neom, with Aqua Power as the biggest utility-scale hydrogen project in the world,” de Hook said, adding that the Gulf can be an important and successful player in the market.

By Jonathan Gorvett

September 18, 2025, 4:11 PM