Why Palladium Has Trailed
- EV fears crushed sentiment: Investors assumed EVs would kill autocatalyst demand overnight
- Russian supply overhang: Despite sanctions, Russian output held up short-term
- Substitution to platinum: Auto manufacturers shifted some loadings to cheaper platinum
The gold/palladium ratio is stretched to historic extremes — cheaper relative to gold than at almost any point in two decades. That's sentiment, not fundamentals.
Supply Crunch: Tightest Fundamentals
Russia (40%+ of supply) faces escalating sanctions and logistical issues. South Africa (40%) battles power outages, strikes, and depletion.
No meaningful new mines coming online — lead times are 10+ years. Above-ground stocks are depleted. Market has been in structural deficit since 2018.
Palladium's supply elasticity is basically zero. Any demand surprise triggers violent price spikes.
Demand: Far From Dead
The "EV apocalypse" narrative was overblown. Hybrids (which use MORE palladium than pure ICE) are booming as a bridge technology. Gasoline vehicles still dominate new sales globally.
Emerging catalysts: hydrogen fuel cells, advanced emissions standards, industrial uses. Plus monetary demand spillover as gold and silver rally.
The Catch-Up Potential
History shows palladium moves in violent bursts. From 2016–2021, it delivered a 10x rally.
We see $2,000 as the first realistic target. $3,000+ is entirely plausible in a continued inflationary regime. Miners offer triple-digit torque.
This laggard has way higher to go — potentially leading the metals charge in 2026. Don't sleep on it.