Could Platinum Ever Outpace Gold Again? -

Welcome to this week’s market wrap podcast, I’m Mike Gleason
Coming up don’t miss our exclusive interview with Edward Sterck of the World Platinum Investment Council. Mike Maharrey and this week’s guest dive into the Platinum Group Metals and in particular discuss why we’ve seen a divergence between the price of platinum and the price of palladium and what’s behind that dynamic.
Mr. Sterck also talks about how the war with Iran, tariffs and trade policy have impacted the PGMs in recent months, and shares his insights on how the western world, in particular, is starting the favor platinum jewelry over white gold – which has seemingly fallen out of favor – and what impact that may have on platinum from a jewelry demand standpoint moving forward.
So, be sure to stick around for another fascinating Money Metals interview with this week’s guest Edward Sterck of the World Platinum Investment Council, coming up after this week’s market update. And as a reminder please download, like, rate and subscribe to this podcast wherever you consume this content.
Well, it turned out to be a pretty good week to own gold and silver.
After a rough finish to July, the precious metals market got back on its feet this week. Gold clawed its way higher day after day, silver outperformed once again, and then Friday's weak U.S. jobs report poured gasoline on the rally.
The week's biggest story wasn't really gold or silver. It was the growing realization that the U.S. economy may finally be slowing enough to force the Federal Reserve's hand.
Early in the week, the backdrop was already improving for precious metals. Treasury yields drifted lower, the dollar softened, and traders continued digesting last week's surprisingly contentious Fed meeting. While the central bank left interest rates unchanged, the unusually public disagreement among policymakers suggested the consensus around "higher for longer" isn't nearly as solid as it once appeared.
At the same time, crude oil prices eased as geopolitical tensions in the Middle East showed signs of cooling. That might sound like bad news for safe-haven assets, but lower energy prices also take some pressure off inflation. And when inflation expectations ease, markets begin dialing back expectations for future rate hikes. That's often a winning combination for gold.
Then came Friday morning.
Economists were looking for another month of modest job growth. Instead, the Labor Department reported that the economy actually lost jobs in July. As if that weren't enough, payroll gains from the previous two months were revised sharply lower. Suddenly, the story wasn't about a resilient labor market anymore. It was about an economy that's showing unmistakable signs of losing steam.
Markets didn't need long to figure out what that could mean.
Treasury yields fell. The dollar dropped. Traders immediately began pricing in a much lower probability of additional Fed tightening this year. And gold and silver took off.
It's another reminder that precious metals don't just respond to inflation. They respond to expectations. And expectations changed dramatically in just a matter of minutes.
If investors become convinced the Fed is finished raising rates – or even that rate cuts could move closer onto the horizon – that changes the calculus. Lower interest rates reduce the opportunity cost of owning gold. A weaker dollar makes both gold and silver more attractive around the world. That's exactly the environment the metals found themselves in by the end of the week.
Silver, meanwhile, once again reminded everyone that when the precious metals sector starts moving, it often moves first – and faster. That's the nature of silver. It tends to lag during periods of uncertainty, but once momentum builds, it frequently outpaces gold by a wide margin.
Of course, one jobs report doesn't make a trend. Next week's inflation data and the reports that follow will still matter. The Fed isn't likely to declare victory over inflation overnight, and policymakers will want more evidence before changing course.
But the direction of the data is becoming harder to ignore.
For the better part of three years, the Fed has justified restrictive monetary policy by pointing to a remarkably strong labor market. If that pillar starts to crack, the entire policy outlook begins to shift. Markets know it. And judging by Friday's reaction, precious metals investors know it too.
Stepping back, this week was a perfect example of why it's dangerous to focus on just one headline. Gold spent the week balancing competing forces – easing geopolitical tensions on one hand and weakening economic data on the other. By Friday, the growth story clearly won out.
So, as we wrap up the week, the bulls have regained some momentum. Gold is pushing toward recent highs, silver is once again showing why it can be the more explosive metal, and investors are heading into next week asking a very different question than they were just a few days ago.
The question is no longer whether the economy is slowing. It's whether it's slowing enough to force the Federal Reserve to blink.
And that's a story gold and silver investors will be watching very closely.
Well, before we get to this week’s interview let’s take a look at the specifics of the weekly price action in the metals.
Gold is up nearly $300 or a whopping 7.3%. The yellow metal is having its best week since January and currently checks in at $4,341 an ounce.
Turning to silver, it shows an outsized gain of 10.7%, up more than $6 on the week to trade at $63.84 as of this Friday late morning recording.
As for the PGMs, which will be the subject of our upcoming interview, platinum is up a cool $100 or 6.2% to check in at $1,753 an ounce. Palladium is up just over $100 itself, advancing 8.1% since last Friday’s close to trade at $1,389.
Well now, without further delay let’s get right to this week’s exclusive interview.
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Mike Maharrey: Greetings, I'm Mike Maharrey and I'm joined today by Edward Sterck. Edward is the director of research at the World Platinum Investment Council, and really excited to talk to you today. How are you doing today?
Edward Sterck: Edward? Yeah, good, thanks, Mike. Thanks for having me on. I'm looking forward to a good conversation.
Mike Maharrey: Yeah, absolutely. So, usually we talk a lot about gold and silver on this show. We don't talk about platinum as much, although maybe we should. So I'm really excited to get your perspective on what's been going on with platinum and palladium. Just kind of watching the price trajectory, it is kind of followed gold and silver. We saw a big run up late last year into January, then we saw a correction, and then we've had a little bit of sideways trading over the last several months. So, what I would kind of like you to do, if you can, is just maybe talk about and compare and contrast the dynamics that are driving these two markets. What might be similar to what we're used to in gold and silver, and what are some things that might be different that are impacting platinum and palladium right now?
Edward Sterck: Well, I think it's a really interesting question because things have changed quite a lot over the last 15 months or so. And actually a helpful guide to how things have changed has actually been the price performance. So, if you look at platinum, it was largely range bound for 10 years or so between roughly $900 and let's say $1,100 per ounce roughly. And then in May of last year, it began to rally quite hard. And that obviously continued through until January of this year. Now, I think if you look at the catalyst for the rally, it was very much driven by supply demand fundamentals. We were in our third year of significant platinum market deficits. Obviously in commodity markets, you can't have a deficit, so it's balanced by drawing down from above-ground stocks. And I think those were just depleted to unsustainably low levels. And as a result, in order to, I guess, effectively for the owners of those above-ground stocks to release more metal to the market, they just had high value expectations.
So, you see the price move higher to incentivize metal in and so on. And that was really what drove the market ultimately up until about the middle of the fourth quarter. And then I think what we saw then is a broader precious metal rally start catalyzed to a large degree by gold and a pivot towards hard assets that whilst being priced in US dollars are dollar independent in terms of their material value. So, it was a de-dollarization trade. Some people termed it the “sell America” trade. But that kind of demand for gold, there really wasn't enough gold around. And so we saw that kind of cascade into silver, into platinum, into palladium, and even into some of the more investible based metals like copper as well. And that's really what has been driving the market since then. So we saw that price rally continue into January.
It hit probably what were frothy levels at the time. We then saw a fairly sensible price reset. And I think the press metals complex found a level for platinum that was around $2,000 an ounce. That's where the market saw value and it stayed there really up until the beginning of the conflict with the Middle East. And at that point, things changed. We saw higher oil prices drive higher interest rate or higher inflation expectations, and so therefore higher federal reserve rate expectations. That obviously means a stronger dollar and therefore weaker US dollar commodity prices. But I think at the same time, addressing your question, the whole complex is still trading on a precious metal theme rather than supply demand fundamentals. I mean, that said, the supply demand fundamentals for platinum do look quite good still.
Mike Maharrey: How has the war affected the market? And has there been any kind of physical disruption as far as moving metal from one place or another? Or has it been more of just the kind of general market sag we've seen overall with the war?
Edward Sterck: I'd say it's more of the latter. There's some demand destruction at the margins. So, the Middle East, obviously there's significant oil refining capacity there. Platinum-based catalysts are used in those facilities. So when they're offline, in theory, the need for those catalysts reduces a little bit, but it's not that significant in the broader scope of things. But for the most part, the bigger impact has been the effect on inflation expectations, movements in what people are anticipating in terms of federal reserve activity, monetary policy, and so on. And that's just been a bit of a drag on the whole complex.
Mike Maharrey: Yeah. Yeah, that makes sense. So, back in June, I wrote an article and it was based after some data that was released by Metals Focus. And it talked about the fact that there's been this divergence over the last few months between platinum and palladium with a little bit more of a bearish sentiment toward palladium and more bullish toward platinum. Can you explain the dynamics that are going on between those two particular metals and what's driving this divergence?
Edward Sterck: Yeah, absolutely. So, it comes down really to their end users. So, in terms of platinum, around 40% of global platinum demand is for catalytic converters going into vehicles with internal combustion engines. Ultimately, as the world continues to electrify vehicles, that's ultimately a drag on demand. We think that process is going to take longer than a lot of market commentators have in the past. I think most people have come down to where we are now. And so that means a kind of higher for longer demand profile for PGMs. The problem for palladium is whilst platinum is around 40% exposed to the automotive market, for Palladium it's over 80%. And so that just creates a negative sentiment around the metal. But the bigger problem is ultimately actually recycling rates. So, for palladium, we're expecting much more recycling supply to come into the market and that to drive it into a surplus in combination with that slow automotive drag.
Edward Sterck: And that kind of trend I think is well, it's well understood by the market. If I'm honest with you, that kind of tipping point from a deficit for Palladium, which is what we're still in, into a surplus is constantly being pushed back. So, there's kind of bearish sentiments towards palladium that's been circling for a number of years now. It kind of doesn't go away, but it also actually isn't always reflective of the reality in the near to medium term. So, palladium, it is still in deficit at the moment. I think given there's a shortage of metal, we'd probably expect it over maybe a 12-month outlook to continue to trade and step with the rest of the precious metals. But it's just worth bearing in mind that there is that sort of slightly bearish overlay. I think one of the other things of course as well is that, I mean, reflecting a little bit on the futures market now, the futures market for palladium is always skewed towards the downside.
So, that overall bearish sentiment is playing out in positioning there. But the problem with that is it means any kind of disruption to palladium supply. I mean, for example, Russia produces 40% of global palladium supply. If there was a problem with one of their mines, then you see a sharp spike in palladium prices. So it's very vulnerable to these short, sharp price rallies that's worth bearing in mind because they present an opportunity.
Mike Maharrey: Yeah. Yeah, definitely. That's interesting. I know just enough about the platinum and palladium use in catalytic converters to be dangerous. So I'm going to throw out some things and I would like for you to confirm or tell me I'm an idiot and I'm wrong. The two metals are somewhat substitutionary in catalytic converters, right? You can use both platinum and palladium. So, if platinum gets significantly higher, they could switch to palladium and vice versa. But as I understand it, the process that required to make that switch isn't something you can just snap a finger and do it. Is that kind of a fair overview?
Edward Sterck: Yeah, no, absolutely. I mean, particularly in gasoline vehicles, they're almost one-to-one substitutable. But for the automakers, once you've gone through the certification process for a new model and it's in production, you don't change the mix of PGMs in the catalytic converter. So, if you design that vehicle as we had over the last few years, a low platinum price environment and a high palladium price environment, you go with a stronger platinum mix. Ultimately, in our numbers, we assume that we begin to see a reversal in favor of palladium just because of the balances in the market that we see. But at the same time, there's some sort of supply chain risk management considerations that may encourage at least Western automakers to stick with a higher platinum ratio in their catalytic converters. And that's mostly related to Russia. So if we think about global mine supply, for platinum, about 70% comes from South Africa, about 80% from Southern Africa, including Zimbabwe.
Edward Sterck: And only 11% of platinum comes from Russia. For Palladium, it's 40% South Africa, 40% Russia. So even if you're not buying Russian Palladium, you're still increasing your market risk to it. Say, for example, I don't know, the powers that be suddenly decided to sanction Russian Palladium, then obviously that would have quite a big impact in terms of the availability of metals for the market as a whole.
Mike Maharrey: That's very interesting. How has the tariff situation impacted platinum and palladium? Have they been widely exempted or are they being impacted by the tariffs? And do we have any sense of how that might play out down the road given the volatility of the current administration when it comes to trade policy?
Edward Sterck: Yeah, I mean it's been a wild ride. So, if we think back to, I came back to November 2024 when it became increasingly clear that the incoming administration was going to have tariffs as a major part of its policy effective trade policies and I guess international policy considerations. We began to see that reflected in the metals markets by, for platinum and palladium, high lease rates. So that's the cost of borrowing metal and it's indicative of when you're having shortages in the market. And what we gradually discovered is that there were a lot of end users and market participants in the US who were onshoring metal ahead of their needs because they were concerned about potential future trade barriers effectively impacting the availability of metal, at least at then prices. So the visible portion of that for both metals is the exchange warehouse inventories that were associated with the futures markets.
And those went up for platinum from around 150,000 ounces to around 750,000 ounces. So, quite a large volume of metal that moved into the US. And like I said, that's just the visible portion. There's other metal that may not have been lodged with the exchange. I think as 2025 and 2026 has unfolded, some of those trade fears have abated mainly this year rather than last year. So we have seen some metal come out of those futures exchange warehouses and back into the market, which has helped ease some of the market tightness in the short term. I'd say there are still some overhangs or potential future risks rather. So you've got the Section 232 investigation into critical minerals that was supposed to conclude in July, and that data's been missed. So it's something that could come in at any time. I think let's be realistic. If you've got critical minerals, why would you tariff them?
So, I think the likelihood of tariffs is fairly low. You're more likely to say to South Africa, "Okay, we want some kind of preferential trade agreement or we're going to tariff your wines or something." I don't know.
There's also, you've got the section 301 investigations that are ongoing. Those are mainly focused on manufactured goods. So, the impact for that from a precious metal perspective is that there's potential, particularly for platinum and palladium, that automotive parts that contain those metals might get tariffs. That might make things like vehicles more expensive, which is slightly negative for demand. And then finally, you've got a USITC investigation into allegations of Russian dumping of palladium into the US market. Now that's already been through the courts once. And at the very last moment it was ruled that there wasn't any damage to the US, but that ruling has been appealed, so it's going to go through the appeal process now. So that's something that could maintain some tension in the Palladium market.
Mike Maharrey: Yes. Courts can always create tension. No doubt about that. Are there significant military applications for platinum and palladium? I know that I've talked to folks that are heavily involved in the silver market and they say yes, the increase in defense spending and wars and stuff definitely increase silver demand, but nobody can really pinpoint how much. How does platinum and palladium … how does they fit into the defense and military sector?
Edward Sterck: I mean, the answer is that the defense industry needs those metals. It's one of the reasons that they have been identified as being critical minerals by the US and by many other countries and geographies around the world is because of the fact that they are actually really essential to the production of a lot of military hardware. From a demand perspective, it doesn't really move the needle, but it's just that you absolutely have to have them. And so I mean, it's things like some of the semiconductors that go into missiles and drones. These metals are very tolerant of high temperature environments. So, that means that they can be used in applications where other metals cannot be used. Things like ruthenium, which is another platinum group metal, it's not particularly investible, but just to give you an example, cruise missiles use ruthenium nickel alloys in the turbine blades.
Again, because of the high temperature resistance and that's a characteristic of the metal that you can't get from any other metal. I mean, ruthenium, it's precious metal still. It's still $1,600 an ounce or something. So, you're only going to use it if you really have to.
Mike Maharrey: Yeah. Interesting. How has the higher price for gold and silver, how has that impacted the market for platinum jewelry? My mom loved platinum jewelry when I was growing up in the 80s. That was her thing. So, I kind of have a soft spot for platinum in terms of jewelry. I'm curious, as the price has gone up for gold and silver, has that given a boost to the platinum market or of course platinum's gone up too. How have you seen that playing out?
Edward Sterck: So, I'd say silver's a bit different. It's addressing a different part of the jewelry market to platinum. It's more of the mass market. Platinum is typically mid-range to fine jewelry. There have been some benefits, particularly in markets like the US and in Europe, which are quite big white gold markets because the gold price, white gold as an alloy, was produced to be a low cost alternative to platinum that looked superficially visually simulate. But the gold price went so high that actually white gold was being priced at a premium to platinum at one point. And this is in the store, it's not just in a wholesale level. So we've seen fairly consistent, steady growth in jewelry demand in the world as a whole, except for in China. So China platinum was a very in vogue metal in the late 2000s and early 2010s. Demand peaked in about 2014.
And then we've just seen a number of factors that have eroded jewelry demand as a whole in China. It's impacted gold as well. Things like the clampdown on what they termed gift giving in China was negative for all of the precious metals and diamonds as well. But also we've just seen consumer preferences and consumer demands shift more towards things like the latest smartphone and handbag and stuff like that and experiences. So people are just spending their money elsewhere. So, China for platinum, we've just seen a steady downward decline in jewelry demand. Last year we got a bit excited that it was about to be reborn because of the high gold prices, but it proved to be a bit of a damp squib.
Mike Maharrey: Interesting. So, I’ve got kind of a meta question for you. A lot of folks that are listening to the show are gold and silver investors. We talk about gold and silver a lot. As I mentioned upfront, we don't talk about as platinum as much, but we do sell platinum products at money metals and also palladium. And we recognize its value as an investment metal as well as industrial. Of course, it's not a monetary metal, so that makes it a little different than gold and silver. So, if I'm a guy that's sitting out here in the audience right now and I'm listening to this conversation, I'm thinking, well, this is interesting. You haven't really thought about platinum or palladium. How would you talk to them and what would you say to them to give them a reason to maybe invest in platinum? Why would it be a good idea to diversify a precious metals portfolio with platinum and/or palladium?
Edward Sterck: Well, I think for platinum, in particular, one of the things that makes it stand out is the diversity of its end users. So, it's exposed to so many different sectors. You can think of it versus gold as being a little bit more pro-cyclical as a result. So it sits in a slightly different part of your portfolio as a result and provides some different opportunities. From a supply demand perspective, it's also worth bearing in mind. We've got the market in deficits really for the foreseeable future, slightly depending this year upon what happens with investment demand. So we have seen some outflows from ETFs and those warehouse exchange stocks that I mentioned earlier that could, if we remain where we are today, push the market back towards a more balanced market. That said, going back to the earlier comment on interest rate expectations, I think the market is slightly overestimating the potential for the Fed to raise rates.
It's more likely, I think we'll see a flat environment this year. That's a personal opinion. And I think that brings a bit more support back into the precious metals complex, which I think we've kind of seen actually begin to emerge a bit this week, looking at how they're all performing. The other thing for platinum, and going back to its end uses, is there are areas where we could see fairly significant demand growth over the next couple of years. So the first one would be in hydrogen and a second order impact of the conflict in the Middle East is I think a lot of areas around the world, Europe, for example, and East Asia, they're looking at their energy security. So, I think for green hydrogen, this could be a little bit like the '70s oil crisis was for North Sea oil and gas production in Europe.
It could be a catalyst for that because you do need renewable energy, so you've got to build that first. But you can't electrify everything directly. You can't electrify using hydrogen as an energy carrier. And so that could be quite significant in terms of the outlook for that and platinum is used within the hydrogen industry. The other area is AI. So we're seeing this is actually really quite new. In fact, it's only just emerged in the last six months or so. These end users have been there. We just weren't fully aware of them. But the semiconductor, the optical crystal production, those are for the data center interconnects. These are actually potentially fairly significant end uses for PGMs and for platinum and palladium in particular that we're still trying to get to grips with them, I don't think are fully factored into people's supply demand outlooks. So there is the potential for that diversity of end users to drive demand higher than we're seeing at the moment.
Mike Maharrey: Yeah. And I think just to reiterate, this market deficit, that is a significant thing. When you're pulling less metal out of the ground than is being used, that's going to create that price pressure. As you say, people that are holding the metal, they're going to ask for a little bit more to give it up. So I think looking at both of the supply and demand dynamics, I think that's a very good point. So, I'll get you out on this one. And this is just, I'm going to ask you to speculate. And by the way, I agree completely with your assessment of the Fed. I've been saying for a long time, I don't think that they can really raise rates given the levels of debt that we see in the United States and around the world. But I mentioned that my mom loved platinum. And of course, when I was a kid in the '80s, platinum was actually more expensive than gold.
It was not the gold standard, it was the platinum standard. And you still see that interestingly. If you're a frequent flyer with Delta, their highest level is platinum. Gold is lower than platinum. Do you ever see a time when platinum regains that parity or even outpaces the gold price or is that kind of a relic of the past?
Edward Sterck: I think if you go back to as far as 1980 from then until today on average, and this is including the last few years when platinum has been at a discount to gold, platinum on average has traded at twice the gold price. Now that's partially because gold was suppressed for a long time due to the gold standard. But certainly platinum in terms of scarcity is significantly scarcer than gold. It's about 30 times less available. So, that makes intrinsically a more precious metal. And that arguably should be reflected in its pricing. I think the challenge in the near term is really one of the things you touched on earlier, which is gold is a monetary asset and platinum isn't. And so it's the kind of go-to asset. And partially because the market is bigger, it is more available. It's got greater liquidity. So, it is becoming the go-to asset for central banks who are nervous about weaponization, if you like, of the international financial markets, which are obviously dollar denominated.
The potential for that rather than actuality, I should say. And so that's really what's been driving central bank gold buying since about 2014. And it's difficult to see that necessarily changing in the current global geopolitical environment where we seem to be going from a world dominated by a strong and confident US to a more multipolar world with greater uncertainties.
Mike Maharrey: Yeah. Yeah. I think all of that is absolutely correct. Well, I really do appreciate you taking time out of your day. I know you're toward the end of your workday across the pond there, so I appreciate you working this out and getting me on your schedule. Before we go, I do want you to let folks know where they can follow the work of the World Platinum Investment Council and maybe give folks a little bit of a sense of some of the data and information that you guys provide.
Edward Sterck: Well, thank you for the opportunity. Yeah, so our website is platinuminvestment.com. We publish all of our research on there for free. So, there's usually one or two reports that come out a month. Probably our most accessible type of research is, which actually comes about much more frequently, is something called 60 Seconds in Platinum, which you can access on the website or subscribe to and it'll land in your inbox. And all of these publications are also flagged up on LinkedIn on our corporate profile page there when they're released. So, I mean, we run full supply demand analysis for everything from the automotive drivetrain to hydrogen to all of the underlying factors behind the platinum and Palladian markets. And we try to help people understand the dynamics that are impacting value expectations both now and into the future. So, it's all available there.
Mike Maharrey: Yeah, absolutely. You guys did fantastic work and I'm glad you're out there. I appreciate the data that you provide, and it helps folks like me and those listening to make sense out of maybe a sector that people aren't quite as familiar with. So, I would encourage folks to maybe take a little bit of time in the next few days, visit the website there and familiarize yourself with the market because it's a whole other world of precious metals that we can tap into. So, Edward, thanks again for taking time out of your day and for hanging out with me, and we'll definitely get you back on in the future as things continue to unfold in those markets.
Edward Sterck: Brilliant, Mike, thanks very much indeed. It's been a good chat.
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Some very interesting analysis on the PGMs there and I hope you enjoyed that.
And that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And remember to tune in as well to the Money Metals Midweek Memo, hosted by Mike Maharrey.
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Until next time, this has been Mike Gleason with <a href="https://www.moneymetals.com/">Money Metals Exchange</a>, thanks for listening and have a wonderful weekend everybody.

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