The rally in platinum continues into the third consecutive session, with prices rising to the highest level seen in more than six years over rising optimism that a rapid global economic recovery could boost the demand for the precious metal. At the time of writing, platinum is trading at a little above $1,307.

Platinum sees high demand among car manufacturers for its use in manufacturing catalytic converters to clean exhaust fumes from automobiles. An improvement in global economic conditions on the back of the COVID-19 vaccine rollout could lend a boost to the auto industry and revive demand for the metal as manufacturing picks up across the world.

Supply concerns at South Africa – the world’s leading producer of platinum, could keep supply in deficit for the third straight year in 2021. The possible tightening in supply even as demand looks set to rise have supported the recent rally, while also boosting the prices of palladium – another metal that is used extensively in the automobile industry.

In addition, a weakness in the US dollar has also contributed to an increase in demand for the metal. As the dollar trades bearish, platinum becomes more affordable to purchase for holders of other currencies.