What's Driving Precious Metal ETFs Rally in 2025?

The precious metals market has been on a tear in 2025, with gold, silver, and platinum all posting impressive gains. Gold topped a record peak of $3,500 per ounce in April, while silver surged past $37.00, levels not seen since February 2012. Platinum skyrocketed to an 11-year high of $1,432.60 per ounce. The rally marks one of the strongest performances for the sector in recent years, fueled by a mix of safe-haven demand and strong industrial consumption. 

This has resulted in a strong rally in ETFs tracking these precious metals. abrdn Physical Precious Metals Basket Shares ETF GLTR, which seeks to reflect the performance of the prices of physical gold, silver, platinum and palladium, in the proportion held by the Trust, spiked 27.4%. abrdn Physical Platinum Shares ETF PPLT has risen 50.7% so far this year, while SPDR Gold Shares GLD and iShares Silver Trust SLV gained 26.8% and 27.3%, respectively.

Here’s a closer look at what’s driving the precious metals rally in 2025:

Platinum Shines on Supply Deficit and Strong Demand

After being in the doldrums for a long time, platinum has made a solid comeback in recent months, driven by strong industrial demand, supply constraints and clean energy adoption (read: Platinum ETFs Outshining Gold & Silver in 1H2025: Here's Why). 

Platinum is one of the rarest precious metals, primarily used in automotive catalytic converters, chemical processing, electrical components and petroleum refining. About 80% of global production comes from South Africa, followed by Russia and North America. South Africa faces challenges such as aging infrastructure and operational disruptions, leading to reduced output.

A resurgence in platinum jewellery demand in China is expected to drive a 5% increase in global jewellery demand in 2025. High gold prices have prompted consumers and jewelers to turn to platinum as a cost-effective alternative. Automotive demand remains resilient despite market uncertainty, with a modest 2% decline forecast to 3,052 koz for the full year. The slowdown in EV adoption has led to sustained demand for internal combustion engine (ICE) and hybrid vehicles, both of which utilize platinum in catalytic converters. Investment demand remains robust, projected at 688 koz, supported by strong bar and coin purchases in China. 

Meanwhile, the platinum market is grappling with a pronounced supply deficit. The World Platinum Investment Council (WPIC) projects a shortfall of 966 koz, marking the third consecutive annual deficit and reinforcing concerns about tightening market fundamentals. 

Platinum also plays a pivotal role in the burgeoning hydrogen economy. It is used in fuel cells and hydrogen electrolyzers—core technologies in the clean energy transition. With governments and corporations ramping up investments in hydrogen infrastructure, demand for platinum in non-automotive industrial applications is soaring.

Silver Hits 13-Year High on Industrial Demand and Tight Supply

Silver prices have rallied sharply, outperforming gold in recent weeks and benefiting from its dual role as both an investment asset and an industrial metal. Geopolitical tensions and uncertainty over the Trump administration’s trade policies enhanced the metal’s attractiveness among investors. 

Additionally, the white metal is used in a wide range of industrial applications. The global push for green energy, increasing demand in areas like 5G, a rebound in global computer shipments, the photovoltaics (PV) and automotive industries and new sources of demand for sensors used in IoT and OLED lighting will continue to boost silver demand (read: ETFs Riding High on Multi-Year Record Silver Prices). 

A major tailwind for silver is the sustained supply deficit in recent years. The silver market is heading for the fifth year of deficit, driven largely by surging industrial demand, particularly from the green energy and electronics sectors.  

Gold Rally Driven by Central Bank Buying and Dollar Weakness

Trump’s tariff chaos, escalating geopolitical tensions, weakening U.S. dollar and growing expectations of Federal Reserve rate cuts have bolstered gold prices. Central bank demand also remains a key driver. 

Global central bank gold purchases rose to 20 tonnes in May, up from 16 tonnes in April, according to the World Gold Council (WGC). With this, the central banks are on pace to acquire 1,000 metric tons of gold in 2025, marking the fourth consecutive year of robust buying as they continue to diversify reserves away from dollar-denominated assets into bullion, according to the consultancy Metals Focus (read: Gold ETFs Shine in 1H: Will the Bloom Continue in 2H?).

Sustained institutional demand, along with solid jewelry and investment flows, will drive the metal higher. Looking ahead, most analysts forecast that gold will remain elevated, trading in the $3,200–$3,400 per ounce range. Major banks have revised their price targets upward as bullish sentiment gains momentum.

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