The Metal That Won’t Sit Still

If gold is steady and silver is cyclical, palladium is pure volatility. After years of supply deficits that pushed it to record highs, the palladium market in 2025 is a very different story — one defined by shifting auto demand and looming trade risks.

Key Players in Palladium

  • Automakers: Historically the largest palladium consumers for gasoline engine catalytic converters.

  • Russian Producers: Russia controls a significant portion of global supply, making the market highly sensitive to geopolitical developments.

  • Investors: Hedge funds often treat palladium as a tactical trade rather than a core holding.

A Market in Transition

According to Johnson Matthey’s PGM Market Report:

  • Palladium deficits of the past decade are easing.

  • 2025 may see a return toward market balance as automakers shift toward platinum.

  • Investment flows have thinned as fundamentals weaken.

Risks Driving Volatility

  • Tariff Headlines: U.S. discussion of tariffs on Russian palladium could disrupt supply chains and spike prices suddenly.

  • Auto Trends: EV adoption reduces long-term demand for catalytic converters, weighing on palladium’s structural outlook.

  • Investor Positioning: Thin liquidity magnifies moves — small changes in flows create large price swings.

Palladium’s Price Mechanics

  • Supply Shocks = Explosive Upside: If Russian exports face sanctions or tariffs, palladium could spike overnight.

  • Demand Decline = Structural Weakness: The long-term shift away from gasoline vehicles caps upside potential.

  • Volatility Play: Palladium trades more like a speculative instrument than a long-term store of value.

Historical Context

  • In 2019–2020, palladium shortages sent prices over $2,500/oz.

  • In 2022–2023, volatility from Russia sanctions created sharp but short-lived rallies.

History shows palladium rallies are powerful — but fleeting.

Investor Takeaway

Palladium remains the wild card of precious metals. It can deliver outsized short-term gains during supply shocks, but its long-term fundamentals are weaker than gold, silver, or platinum.

Investors should treat palladium as a tactical trade, not a core holding. Position sizing is key, and news-driven rallies may present opportunities for nimble players.