The Platinum Price Recently Hit a 4-Year Peak. Here’s Why

New York—The price of platinum hit a four-year high this month, fueled by the falling U.S. dollar and a supply deficit.

As lockdowns aimed to curb the spread of COVID-19 went into place in March, the metal’s price bottomed out, hitting a low of around $600 per ounce in the middle of the month.

The metal has been on a gradual, but fluctuating, uptick since then, but multiple sources said the price has been held down by lower demand for diesel automobiles (platinum has been used as a catalyst to help reduce toxic emissions from diesel engines since the 1970s, an area that still drives its highest demand) and competition from gold and silver.

But the white metal rallied this fall, crossing the $900-per-ounce mark in July and the $1,000-per-ounce mark early in December, according to Kitco.

November marked platinum’s biggest monthly gain since 2008, with its per-ounce price rising more than 23 percent, metals trading platform Bullion Vault reported.

Earlier this month, it reached about $1,060 per ounce, Kitco showed. This is its highest point since Q3 2016, as shown by historic charts from Kitco and confirmed by websites Investing.com, Bullion Vault and Invezz.com.

The metal’s price is now aided by the falling U.S. dollar, Bullion Vault said, and a massive supply deficit that has become more apparent in the last quarter, according to the World Platinum Investment Council.

In its third quarter market report, the council said the white metal faces a deficit of more than 1 million ounces this year.

It predicted the supply deficit will continue into 2021; next year, it could be short more than 200,000 ounces.

The platinum price has also risen because of a stalled gold price as an improved global economy has decreased the need for safe-haven assets, encouraging investors to look elsewhere, The Wall Street Journal reports.

And it looks like the price of the metal could continue to rise, with Kitco noting it “appears new all-time highs in platinum are on the horizon,” especially as the World Platinum Investment Council estimates the increase in investment demand will continue into 2021.

Metals Focus predicts the platinum price will average above $1,000 per ounce in 2021.

In the United States, the bridal category led platinum jewelry retail sales recovery in the third quarter.

Consumers also are looking for meaningful products, and retailers are seeing platinum jewelry outperform others