Investment demand has helped lift platinum from a low of $915 an ounce in January last year to a high of $1500 in December and then to its current level of well over $1700

That is a central theme of this year's annual Platinum & Palladium Survey by independent metals consultancy GFMS. And, as its chief executive Paul Walker said when presenting the survey, there are enough financial and economic imponderables to send platinum to $1900 and no lower than $1400.

Palladium is similar. From its January 2009 low of $117, the price of an ouncehas moved to the $560 region.

Last year, GFMS says , the platinum market had its fifth year of a surplus of physical supply over demand. That was despite declines in supplies from South Africa and Russia, the first recorded fall in metal from recycled autocatalysts and a halving of deliveries of jewellery scrap from Japan and China.

Jewellery demand rose strongly on price considerations but industrial demand was down across the board last year, while that for autocatalysts fell precipitously from 2008's 3.62-million ounces to 2.60-million ounces.

Light vehicle makers have been substituting cheaper palladium for more-expensive platinum in exhaust catalysts. But platinum has already been largely superseded in petrol engines and its loadings in diesel engines are slipping. Last year, though, European "cash for clunkers" subsidies resulted in a surge in petrol-driven car sales at the expense of diesel. And much depends on how rapidly China's new vehicle market rises. Like the US market, it is largely petrol-driven.

Regarding platinum, a lot depends on Chinese demand for jewellery, which has been affected by the metal's rising price. The shift has been towards palladium.

Then we have investment demand. The opening of US-based exchange-traded fund (ETF) trading was a significant investment factor in allowing platinum prices to avoid the usual year-end slump. Last year saw a net inflow of 384000 ounces of platinum and 507000 ounces of palladium into ETFs. This lifted total ETF platinum holdings to 681000 ounces and palladium to 1.2 million. But this was nothing compared to the first three months of this year, with platinum net inflows of 277000 ounces and palladium 556 ounces.

Will investment demand persist?

As Walker said a week ago when he presented GFMS's gold survey, demand for precious metals has been driven by fears of economic or financial collapse and inflation, and by near-zero interest rates that have kept the cost of holding metals low.