Investors are increasingly turning to silver and platinum as alternatives to the US dollar, driving prices for both metals higher. Gold, long seen as a safe haven, has experienced a remarkable surge, climbing 25% since the year began, as investors seek refuge amid ongoing global uncertainties.
Interestingly, other precious metals like silver and platinum are starting to gain momentum. With gold perhaps being perceived as overvalued, silver prices have jumped to their highest levels in 13 years, while platinum has reached a four-year peak, both skyrocketing by over 10% this month alone.
Nicky Shiels, an analyst at MKS Pamp, commented, “Gold is a favorable dollar hedge, and this is just the next step in that investment strategy.” She noted that money invested in these metals has nearly doubled in the last couple of years, prompting a “What’s next?” mindset among investors.
Concerns about the US government’s substantial borrowing are pushing many to explore alternatives to the dollar. Silver, which finds itself in high demand for both coins and various industrial applications, is now trading above $36 per ounce and is on track for a record month.
Investment in silver-backed exchange-traded funds has surged this June, showing a marked increase compared to the inflows of 150 tonnes last month. “This feels like a catch-up for platinum and silver compared to gold,” stated Suki Cooper from Standard Chartered, pointing out that the gold-silver ratio has shifted to 93, implying that silver is relatively cheaper than gold.
Unlike gold, both silver and platinum have significant industrial uses, with demand expected to outstrip supply this year. Silver is crucial in manufacturing processes, including soldering, solar panel production, batteries, and glass coatings.
Platinum prices have seen a notable rise, hitting $1,273 per ounce this week—a jump of 18% since the beginning of the month, placing June on track to be platinum’s strongest month since 2008. According to the World Platinum Investment Council, the demand for platinum is spread across various sectors: autocatalysts (40%), jewelry (26.5%), and other industrial uses (26%).
The slow transition to electric vehicles has actually fueled platinum demand, as traditional cars rely heavily on platinum for catalytic converters. In addition, the high prices of gold have led consumers to consider platinum jewelry as an alternative, evident in heightened imports to China in April.
For the third consecutive year, platinum has been facing a structural deficit, and its prices are responding accordingly. “We anticipate both silver and platinum will likely face significant deficits by 2025,” Cooper added, suggesting positive trends ahead. Moreover, interest in platinum is also rising among investors, with Platinum ETFs registering an inflow of 70,000 ounces since the year’s start.
