Gold is so expensive that some jewellers are turning to another precious metal — and it's not silver

• Platinum prices have rallied 30% to over $1,200 per ounce this year.
• The rise in platinum prices mirrors the recent rise in gold prices.
• China's interest in platinum jewelry and diversified demand support platinum's price growth.

Not everything that glitters has to be gold.

Prices of platinum, a white precious metal, have rallied over 30% this year to date, with spot prices currently around $1,200 per ounce. Spot gold prices are around 27% higher over the same period.

Platinum's dizzying rally doesn't just echo the stunning rise of gold prices. It also reflects a more fundamental issue of supply deficit, Bank of America analysts wrote in a note on Friday. Platinum prices are supported by solid fundamentals, wrote the BofA analysts, highlighting demand for the white metal in the jewelry industry.

"After years of declining demand, there is anecdotal evidence that interest in platinum jewellery is now bouncing back in China," they wrote. China is one of the world's top gold consumers.

"Rising gold prices are incentivising jewellers to diversify, in what represents a change to historical patterns," the BofA analysts added.

China imported 11.5 metric tons of platinum in April, its highest monthly intake in a year — a sign that jewelers are pivoting as gold becomes increasingly expensive.

The BofA analysts wrote that even a 1% switch in gold to platinum jewelry could help double the white metal's supply deficit to 1.6 million ounces.

Beyond jewelry, platinum benefits from a diversified demand base, with applications spanning the automotive industry to electronics.

The BofA analysts' assessment came amid a broader surge in precious metals, particularly gold, as investors piled into the time-tested haven asset.

The yellow metal has soared in recent years, fueled by geopolitical instability, including the war in Ukraine. Over the last year, prices of the yellow metal have been supported by demand from China due to the country's economic downturn and broader uncertainty due to President Donald Trump's second term in office.

In April, gold prices hit a historic high above $3,500 per ounce.

Platinum is not the only precious metal benefiting from the rush for gold.

Silver prices have also gained, up 25% this year, although momentum has been softer due to a slowdown in solar panel production.