Platinum holds advance on Powell remarks

Platinum futures held above $1,350 per ounce on Monday, consolidating after three straight sessions of gains. The metal has been buoyed by renewed dovish bets on U.S. monetary policy, with traders reacting positively to Federal Reserve Chair Jerome Powell’s remarks at Jackson Hole on Friday.

Powell’s acknowledgment that the Fed is likely to cut interest rates at its next meeting injected fresh momentum into precious metals, which typically benefit from lower yields and a weaker dollar. Market pricing now reflects an 87% probability of a 25 basis point cut in September, up from roughly 75% a week earlier, according to CME FedWatch data.

Beyond monetary policy, supply-side constraints are adding to platinum’s support. Global output is expected to decline slightly in 2025, weighed down by persistent challenges in South Africa, the world’s largest producer. Local miners are struggling with aging infrastructure, power shortages from Eskom, labor disputes, and cost-cutting measures that have led to production curtailments and even closures of higher-cost shafts.

Meanwhile, Russia, another key supplier, faces both sanctions-related hurdles and operational difficulties, curbing its ability to maintain stable exports. Together, these factors reinforce expectations of a tighter market balance.

On the demand side, platinum continues to benefit from a mix of traditional and emerging uses. Industrial demand, particularly from the automotive sector, remains robust as the metal is a critical component in catalytic converters, especially for heavy-duty diesel vehicles. At the same time, longer-term structural demand is underpinned by its role in the hydrogen economy.

Platinum is essential for fuel cell technology and hydrogen electrolysis, making it a key material in the global shift toward cleaner energy systems. Analysts note that as governments accelerate decarbonization plans, platinum’s strategic importance could grow significantly.

Still, traders remain cautious in the near term. While monetary easing and supply risks offer bullish momentum, headwinds such as sluggish Chinese jewelry demand, uncertain global growth prospects, and competition from palladium and rhodium in industrial applications may limit upside. That said, the current backdrop suggests platinum could remain well-supported if Fed policy softens further and supply-side constraints persist into year-end.