UBS targets platinum price of $1,100/oz by mid-2025 Via Investing.com

Investing.com — UBS Global Research maintained a cautiously bullish outlook on , with a price target of $1,100/oz by mid-2025 in a note dated Monday. The note notes that while market conditions are currently challenging, there are factors that could support this price target over the next year.

One of the key factors behind this outlook is the expectation that the US Federal Reserve will start its easing cycle soon. Lower interest rates are expected to provide support for real assets, including platinum.

“But we expect platinum to lag behind gold until lower rates support stronger industrial activity,” the analysts said. This implies that while platinum may eventually benefit from a change in the economic environment, it may not be the first to react compared to other precious metals such as gold.

For investors with a high risk tolerance, UBS continues to recommend managing the low price risks associated with platinum. The price of the metal can be volatile and current market conditions suggest it is prudent to remain cautious despite the modestly positive long-term outlook.

China’s platinum imports were robust, particularly in the first half of 2024, with more than 59 metric tons imported. This figure surpasses the previous record of 53 metric tons in 2021. However, June imports of 4.3 metric tons were somewhat weaker, indicating potential short-term fluctuations in demand.

China remains the world’s largest consumer of platinum, having consumed 66.1 metric tons in 2023. Last year, China imported nearly 102 metric tons of platinum, suggesting some level of stockpiling. Despite this, demand for platinum in China has seen a change in recent years.

Traditionally, China’s jewelry sector has had the highest demand for platinum. However, over the past five years, demand in this sector has more than halved. The glass industry has now become the main consumer of platinum in China, driven by the construction of new display glass factories. This sectoral shift reflects changes in consumer preferences and industry demands.

The decline in demand for platinum jewelry is attributed to the metal losing its status as the most prestigious jewelry material. Conformable Johnson Matthew (LON: ), this decline is driven by the weak performance of the platinum price. The last time platinum was priced higher than gold was in 2015, and currently Chinese consumers show a clear preference for gold jewelry over platinum.

Another factor weighing on demand for platinum in China is the reduction in car production this year compared to last year.

Given these challenges, UBS has revised down its December 2024 and March 2025 platinum price forecasts by $25/oz.