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The Trump administration's policies and repeated attacks on the independence of the Federal Reserve are bringing into question the role of the US dollar as the global reserve currency and driving demand for precious metals as fiat currency alternatives.
"Whilst gold is the primary focus as a monetary asset, demand is so strong that there is significant spillover into the other precious metals, supporting broad-based price increases. This trend looks unlikely to abate through 2026
"For platinum specifically, three years of substantial deficits have eroded above ground stocks to unsustainably low levels," states World Platinum Investment Council research director Edward Sterck.
"This, in combination with robust three-way geographic competition for metal between the US, Europe and China, has resulted in a significant shortage of metal availability in international markets.
"This is evidenced by elevated lease rates and strong over-the-counter (OTC) London forward curve backwardation.
"Platinum's strong underlying fundamentals offer further support for the price in addition to the broader precious metals trend under way," Sterck adds in a media release dated January 13, which prompted these questions.
Mining Weekly: Why should repeated attacks on the independence of the Federal Reserve bring into question the role of the US dollar?
Sterck: The independence of the Federal Reserve is crucial for controlling inflation and maintaining economic stability, allowing the Fed to make unpopular but necessary interest rate decisions free from political pressure. The apolitical independence of the Fed is critical to supporting global confidence in the dollar as a safe reserve currency. Signifying the importance of central bank independence, the UK granted the Bank of England operational independence for setting interest rates in May 1997 to remove short-term political influence. Countries that have eliminated the independence of their central banks include Argentina, Russia, Turkey Venezuela and Zimbabwe, with politically forced interest rate cuts then typically resulting in periods of significant inflation and currency devaluation.
To what extent is government-issued money under threat?
Government issued money isn't under threat, but some are questioning the suitability of the US dollar to continue as the reserve currency of choice and the currency for around 60% of global trade. One thing in the US dollar's favour in this regard is the lack of a strong alternative.
Where does platinum rank as a fiat currency alternative in your view?
Being physical assets, precious metals are alternatives to fiat/paper currencies. Platinum would rank 2nd/3rd after gold.
Why do you expect demand for precious metals as fiat currency alternatives to likely continue through 2026?
We're only two weeks into 2026, but events to date suggest the trend will continue given US international posturing, the upcoming S232 investigation results, the USITC Russian palladium anti-dumping investigation and the US mid-term elections.
And what's the big takeaway?
We have a highly supportive macropolitical environment for the whole of the precious metals complex, but platinum specifically has the added benefit of strong underlying fundaments. Platinum supply and demand are relatively price inelastic, and three years of significant deficits have depleted above ground stocks to unsustainably low levels. The shortage of metal availability is illustrated by historically elevated lease rates and strong forward curve backwardation in the London OTC market.
PLATINUM GROUP METAL ONSHORING
The US is reportedly net short platinum group metals (PGMs) and tariff fears have led to US onshoring of PGMs beyond users and speculators amid platinum's m

Platinum research head notes demand for precious metals as fiat currency alternatives

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