UBS Global Research Predicts Platinum Price to Reach $1,100/oz by Mid-2025
UBS Global Research has reaffirmed its cautiously optimistic stance on platinum, setting a target price of $1,100/oz by mid-2025 in a recent note. Despite current market challenges, the analysts believe that several factors could drive platinum to this level in the coming year.
Key among these factors is the anticipated easing cycle by the U.S. Federal Reserve, which is expected to lead to lower interest rates. This, in turn, is likely to bolster real assets like platinum. However, the analysts caution that platinum may take longer to benefit from this shift compared to other precious metals such as gold.
For investors willing to take on higher risks, UBS advises prudently managing the downside risks associated with platinum, given its volatility. While the long-term outlook is moderately positive, the current market conditions warrant a cautious approach.
China’s platinum imports have been strong, particularly in the first half of 2024, surpassing previous records. However, there were slight dips in June, indicating potential short-term demand fluctuations. Despite being the world’s largest platinum consumer, China has witnessed a shift in platinum demand from the jewelry sector to industries like glass, driven by changing consumer preferences and industrial needs.
The decline in platinum jewelry demand in China is attributed to its perceived loss of prestige and poor price performance compared to gold. Additionally, reduced car production this year has further weighed on platinum demand in the country.
In response to these challenges, UBS has adjusted its platinum price forecasts for December 2024 and March 2025 downward by $25/oz.
In summary, while UBS remains cautiously optimistic about platinum’s future, investors should be mindful of the potential risks and market dynamics that could impact the metal’s price trajectory. Understanding these factors can help individuals make informed decisions about their investments and financial portfolios.