Platinum Jumps, Palladium Leaps 7% as London Bullion 'Stays Tight'
Thursday, 6/26/2025 16:20
PLATINUM leapt to new 10-year highs and sister metal palladium also jumped on Thursday amid worsening "tightness" in London bullion's platinum-group metals market, as the US Dollar sank on weak economic data and rumors that President Trump is about to try replacing Federal Reserve chair Jerome Powell.
With gold and silver again giving back earlier rallies to trade at $3310 and $36.50 per Troy ounce, platinum eased 1.3% from an overnight jump to $1415 per ounce, its highest since August 2014.
"The recent surge in Chinese investment and jewelry replacement is shining a spotlight on platinum's supply deficit," Bloomberg quotes one investment fund provider's analyst,
repeating a trend identified by the mining-backed World Platinum Investment Council
last month.
But whilst "widely cited [in] an already tight fundamental market," says PGM expert Jonathan Butler, head of business development at the precious metals division of Japanese conglomerate Mitsubishi, "Chinese physical demand is clearly not the only story in platinum [because] platinum imports are 29% down in the first 5 months of this year compared with the same period in 2024."
Shipments of platinum out of London and Zurich into the USA ahead of President Trump's 'Liberation Day'
trade tariffs announcement saw stockpiles in Nymex-approved warehouses rise almost 5-fold − a move then rendered redundant by the White House exempting bullion from the new import charges.
"This has led to tight forward market conditions," says Butler at Mitsubishi, "with a deep backwardation across the curve", meaning that shorter-term loans − such as 1-month
bullion lease rates, shown at record highs in the chart above − are more expensive than costs for longer-term borrowing.
"Flooding at South African [platinum] mines, a slow re-start to mining in Q1, and inventory sales late last year have further added to the physical tightness," Butler adds. "Though profit taking is possible in the short term, this will continue to provide a supportive backdrop for platinum in the weeks ahead."
Platinum's sister metal palladium − which also finds its largest single use in autocatalysts for fossil-fuel vehicles, but which currently has few other major applications − meantime spiked 6.8% higher overnight Thursday, peaking at a sudden 7-month high of $1120 per Troy ounce.
In contrast to speculative betting on platinum, which has now seen Managed Money traders in US Nymex contracts net bullish 3/4 of the time over the past 12 monts, speculators have now been net short palladium for 141 weeks without pause, running back to October 2022 when prices traded at twice today's level.
Even so, latest positioning data gathered and published by US regulators the CFTC show that net speculative short position in palladium futures and options shrinking to its smallest in over 6 months last week, as Managed Money traders as a group kept their gross bullish betting 2/5ths above the past 12 months' average, but trimmed their bearish bets to the smallest since February, down by 1/4 from the 12-month average.
"While there has undoubtedly been buying interest in palladium despite ongoing tariff and economic uncertainty," says Butler, "this has not been of the scale as that seen in platinum...[for which] the record high gold price, in absolute terms and relative to platinum, has likely driven speculative physical investment."
Western stock markets rose meantime Thursday alongside longer-term government bonds, driving down borrowing costs and pushing expectations for year-end US Fed interest rates down to 3.70%, almost a full 0.25 cut below the US central bank's own forecast for Christmas made only last week.
The drop in rate expectations came as the Wall Street Journal said President Trump is preparing to name Fed chair Powell's successor, a move not needed until next May, as early as September because of his very public anger over Powell failing to cut US interest rates.
America's first-quarter GDP was revised down to a 0.5% annualized drop, with price inflation revised up to 3.8% per year, the highest since Q3 2022.
Consumer-price inflation on the core PCE measure for May is expected to read 2.6% on tomorrow's data, one notch above April's 4-year low.
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