China Pays a 14.45% Premium for Platinum — the Highest in the Entire Precious Metals Complex — While the Metal Still Trades 33% Below Its All-Time High
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On August 24 the Shanghai Gold Exchange quoted Pt99.95 platinum at ¥465.70 per gram, equivalent to $2,154.32 per troy ounce, against an LBMA benchmark of $1,882.30. That is a premium of $272.02 per ounce, or 14.45% — the largest premium of any metal in the precious complex on that day, exceeding silver’s +12.60% and standing in extraordinary contrast to gold, which traded at a premium of just +0.10% for Au99.99 and +0.03% for the deferred Au(T+D) contract. Chinese buyers, in other words, were willing to pay fourteen cents on the dollar above the international clearing price to obtain physical platinum in Shanghai, while declining to pay any meaningful premium at all for gold. Set that against the InProved Terminal’s drawdown monitor, which shows platinum sitting 33.04% below its all-time high while gold sits just 13.97% below its own, and the disconnect becomes the most compelling valuation argument in the complex: the metal that Asia is paying the steepest premium to acquire is also the metal trading at the second-deepest discount to its own historical peak. Platinum has advanced 8.46% over the most recent COT week to $1,881 and 12.45% month-to-date, yet remains -9.74% year-to-date. The physical market and the financial market are telling opposite stories, and the physical market is the one with metal changing hands.
The InProved Terminal’s Shanghai/LBMA spread table for August 24 lists all four contracts side by side with their yuan prices, their dollar-equivalent conversions, and the resulting spread, and reading down that column is the fastest way to understand what China is actually buying. Gold Au99.99 traded at ¥1,003.50 per gram, or $4,642.17 per ounce, against LBMA at $4,637.61 — a spread of 0.10%. Gold Au(T+D), the deferred settlement contract, traded at ¥1,002.85 per gram, or $4,639.16, against the same $4,637.61 benchmark for a spread of 0.03%. Silver Ag(T+D) traded at ¥16,756.00 per kilogram, or $77.52 per ounce, against LBMA at $68.85 — a spread of 12.60%. Platinum Pt99.95 traded at ¥465.70 per gram, or $2,154.32 per ounce, against LBMA at $1,882.30 — a spread of 14.45%. Four contracts, one exchange, one trading session, and a range of spreads running from three basis points to fourteen and a half percent. The variable that explains the ordering is not monetary policy, currency risk, or capital controls, all of which apply equally to every contract on the list. It is industrial consumption.
What the platinum premium specifically reflects is a supply chain under genuine strain, and the reasons are worth setting out because they are structural rather than cyclical. China has essentially no domestic platinum mine production; it imports virtually its entire requirement from South African and Russian producers. Its demand comes from three converging sources: automotive catalytic converters, where Chinese manufacturers have been substituting platinum for palladium as the price ratio between the two metals has made the swap economically compelling; the chemical and petroleum refining sector, which uses platinum catalysts intensively; and the hydrogen programme, where proton-exchange-membrane electrolysis for green hydrogen production requires platinum as an irreplaceable catalyst and where China’s national deployment targets have moved from aspiration to procurement. Against that demand, South African supply — roughly 70% of the global total — has run below pre-2020 levels for five consecutive years under electricity rationing and cost inflation. A 14.45% premium is what happens when a country that cannot mine a metal it structurally needs competes for a supply base that cannot expand. And unlike the silver premium, which has a well-developed arbitrage channel through LBMA clearing banks that continuously moves metal toward Shanghai, platinum’s international physical market is far smaller and less liquid, which means the premium can persist longer and at wider levels before arbitrage compresses it.
The InProved Terminal’s drawdown monitor, current to August 25, measures each metal against its own all-time high and produces a hierarchy that maps almost perfectly onto the structural demand story of the past five years. Gold sits -13.97% below its peak, having spent 2025 and 2026 grinding back toward record territory on central bank and reserve-diversification flows. Platinum sits -33.04% below its own. Silver sits -41.23% below a peak set during the speculative surge of late 2025. Palladium sits -57.98% below its high, the deepest drawdown in the complex by a wide margin. The accompanying summary table for August 25 records platinum’s previous close at $1,861.10 with a one-day return of -1.05%, a weekly return of -1.26%, a month-to-date gain of +12.45%, a year-to-date loss of -9.74%, a year-on-year gain of +38.51%, and a 52-week high of $2,779.41. Palladium closed at $1,335.27 with a month-to-date gain of just +4.09%, a year-to-date loss of -17.77%, a year-on-year gain of +22.50%, and a 52-week high of $2,084.42.
The 24.94-percentage-point gap between platinum’s drawdown and palladium’s is the single most instructive number in the chart, because the two metals were near-perfect substitutes in automotive catalysis for two decades and their divergence is a direct measure of which one the industry chose. Through the late 2010s palladium traded at a substantial premium to platinum as gasoline vehicles displaced diesel and manufacturers optimised for palladium-loaded catalysts; palladium peaked above $3,000 per ounce in early 2022. The substitution response that followed was inevitable and has proven durable: automakers re-engineered catalyst formulations toward platinum, and the palladium premium collapsed. Today palladium trades at $1,335 against platinum’s $1,861 — platinum commands a 39% premium over the metal that once outpriced it by a factor of two — and palladium’s -57.98% drawdown reflects a demand base that is not coming back, because the vehicle fleet is simultaneously electrifying and the residual internal-combustion share has been re-specified around platinum. Platinum’s -33.04% drawdown is therefore a fundamentally different kind of discount from palladium’s: palladium is cheap because its demand has structurally deteriorated, while platinum is cheap because financial capital has not yet re-rated a metal whose demand has structurally improved. The year-on-year returns capture this precisely — platinum +38.51% against palladium +22.50%, with platinum outperforming despite starting from a similar level of institutional neglect. That the InProved Terminal’s own COT extreme-readings panel flags Platinum Commercial at the 10th percentile, described as covered and near flat, adds the confirming detail: the physical trade is not hedging platinum, because at these prices it does not want to be short.
For bullion dealers, a 14.45% Shanghai premium is a fact that sells platinum, and it should be used. The retail conversation about platinum has been difficult for two years because the metal’s year-to-date performance has consistently looked poor next to gold’s, and customers reasonably ask why they should buy the laggard. The Shanghai spread table answers that question in a single line: the largest physical buyer in the world is paying 14.45% above the international price for platinum and 0.10% for gold. That is the entire argument, and it is verifiable. Commercially, the supply position reinforces the case — the platinum retail market is served by a narrow set of formats, principally Platinum American Eagles, Platinum Maple Leafs, and one-ounce and ten-ounce bars from PAMP, Valcambi, and the South African refiners, and dealer inventories across the trade have been run down through two years of weak interest. Minting and refining capacity dedicated to platinum is a small fraction of that dedicated to gold, which means a demand impulse cannot be met quickly and fabrication premiums historically expand 20% to 35% during platinum rallies against gold’s 8% to 15%. Building inventory in the $1,820 to $1,950 range now, before retail attention arrives, is the highest-margin inventory decision on the counter. A twelve-to-eighteen-month spot target of $2,250 to $2,500 is supported by the premium data, the supply constraints, and a 52-week high of $2,779.41 that establishes what the market has already been willing to pay.
For conservative investors, platinum’s role in a precious metals allocation is now clearer than at any point this year, and this week’s data defines it precisely. Gold at the 90th percentile of speculative positioning with an absent Chinese physical bid is fully valued relative to the capital deployed in it. Silver at the 63rd percentile with a shrinking London free float and a 12.60% Chinese premium is the confirmed structural trade. Platinum, with Commercial positioning at the 10th percentile, a 14.45% Chinese premium, and a 33.04% discount to its own all-time high, is the highest-convexity position available — the one with the greatest sensitivity to a broadening of the precious metals cycle, protected on the downside by South African production economics that place a hard cost floor beneath the metal well above $1,500 per ounce. The year-on-year return of +38.51% marginally exceeds gold’s +38.42%, which demonstrates that platinum has already been participating in the cycle despite the negative year-to-date figure that dominates the headline narrative. An allocation of 10% to 15% of a precious metals sleeve to platinum, established at current levels and held on a twelve-to-twenty-four-month horizon, captures that convexity without concentration risk. A twelve-month target of $2,250 to $2,500 implies 20% to 33% upside from $1,881. The principal risk to monitor is a sustained compression of the Shanghai platinum premium below 8%, which would signal that Chinese industrial procurement had been satisfied and would remove the clearest evidence supporting the thesis.
For active traders, the combination of a 14.45% physical premium and Commercial positioning at the 10th percentile argues for expressing a precious metals view through platinum rather than gold for any horizon beyond a few weeks. Gold’s double positioning extreme makes it a poor vehicle for directional risk right now; platinum’s near-empty commercial book means there is no crowded position to unwind against a long. On an outright basis, immediate resistance sits at $1,900, followed by $2,000 and then the $2,154 level that Shanghai is already paying today — a price target that has the unusual virtue of being an observed transaction price in the world’s largest physical market rather than a technical projection. Support is defined at $1,780, the pre-advance consolidation level, with a weekly close below $1,720 required to invalidate. The higher-quality expression for traders comfortable with spreads is a long-platinum, short-palladium ratio position, which isolates the substitution thesis that the -33.04% versus -57.98% drawdown gap documents: the ratio at approximately 1.39 has a first objective of 1.55 and an extended objective of 1.75, both well within the range the two metals occupied before the palladium spike distorted their relationship. The monitoring input that matters most is the weekly Shanghai spread table — a platinum premium holding above 12% while gold’s stays near zero is the confirmation that the physical bid supporting this trade remains intact, and a sustained widening beyond 16% would be the signal to increase size rather than take profit.
Hugo Pascal’s observation about the AU9999 contract hitting a 10-week volume high underscores the increasing significance of physical gold trading on the Shanghai Gold Exchange. This trend not only highlights robust domestic demand in China but also reflects broader shifts in the global gold market toward physical-backed assets.
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