Platinum will rise 80% in the next five years to $2,000 an ounce

Platinum, the precious metal with the worst track record in recent years, can regain its level of years ago. The growing demand for this metal by the automobile industry, the reduced supply, and its importance as a raw material for hydrogen production in new engines means that its price can exceed 2,000 dollars an ounce in the next five years.

Platinum is currently trading at $1,118 an ounce, well below gold. It bottomed out on March 19. The general decline in precious metals led it to close the session at just $593 an ounce, its lowest in the last 18 years. 

On March 4, 2008, the metal closed in the London Bullion Market Association (LBMA) at no less than $2,273 an ounce, multiplying the gold price almost 2.5 times.

However, everything indicates that we are at the beginning of a new bullish stage for Platinum, which may become the leading precious metal in the coming years.

According to Neal Froneman, CEO of the world’s largest platinum miner Sibanye Stillwater, the metal price could rise more than 80% in the next four or five years, thanks to the global economic recovery and supply problems.

Why is Platinum getting much attention?

Demand for platinum group metals has rebounded to levels similar to those before the pandemic. In the case of Platinum, its price has doubled compared to the minimum registered last March.

One of the keys has been the recovery of the automobile industry in China, the largest in the world, which uses Platinum to manufacture catalysts to reduce polluting emissions from vehicles.

According to Froneman, Platinum has only just started to be appreciated, and this trend will continue. There are no reasons why it shouldn’t be trading at $2,000 an ounce and probably above that number.

According to Bloomberg, his opinion should be taken into account. Four years ago, the CEO of Sibanye was criticized for the excessive price paid for acquiring the US palladium miner Stillwater. Since then, the palladium price has nearly quadrupled, allowing the South African miner to resume paying dividends and repaying debt.

In Platinum’s case, its takeoff may come from the increase in its use for the production of hydrogen fuel cells. Besides, some Chinese and North American manufacturers are already experimenting with the substitution of palladium for Platinum to manufacture catalysts for gasoline-powered cars. It is the result of enormous price palladium has reached in the market.

The Sibanye Stillwater CEO isn’t the only optimist about the future of Platinum. Georgette Boele, the precious metals analyst for the Dutch bank ABN Amro, believes that the metal could reach $1,500 dollars an ounce in 2022.