Platinum Outshines Other Precious Metals in 2022

Based on Kitco analytics

Precious metals had a mixed performance in 2022, with platinum being the top performer, up nearly 11% on the year. Silver came in second, with a gain of nearly 3%, while gold ended the year flat. Palladium was the biggest loser, down around 6% in 2022. These precious metals showed their best performance in the last quarter of the year.

Spot platinum began 2022 at around $965 an ounce and ended at around $1,068 an ounce, while spot silver opened last year at $23.28 an ounce and ended the year at $23.93 an ounce. As for spot gold, it kicked off 2022 at around $1,828 an ounce, ending at just above $1,822 an ounce. Spot palladium started off at about $1,902 an ounce and ended 2022 at around $1,790 an ounce.

Why it matters

There are several factors that contributed to platinum's strong performance in 2022. According to the World Platinum Investment Council (WPIC), there is projected to be a deficit of 303 koz in the global platinum market in 2023. The WPIC cited supply constraints and increased bar and coin demand as the causes of the deficit, and also noted that automotive platinum demand was up 25% year-on-year in the third quarter of 2022. Additionally, wage pressure and power constraints at mines in South Africa, the world's number one producer of platinum, could also boost prices.

Another important factor to consider is the macroeconomic environment. The Federal Reserve's historic tightening in 2022, which saw the most rapid hiking pace since the early 1980s, presented a significant headwind for precious metals. Despite this, the performance of platinum, gold, and silver was remarkable, according to Commerzbank analyst Carsten Fritsch.