The Dynamics of Platinum and Palladium: Supply-Demand Mismatch Coexists with Financial Attributes

The trajectory of platinum and palladium in 2026 presents both opportunities and further divergence. Their movements will not only passively follow gold's upward trend driven by financial attributes but, due to differing fundamentals, will ultimately continue to unfold a widening divergence where platinum outperforms palladium. London spot platinum is expected to find robust support in the $1,450-$1,550/oz range and challenge the critical resistance zone of $1,800-$2,000/oz, with the annual average price likely to rise significantly to $1,750/oz. London spot palladium prices may fluctuate within a broader range, with support shifting downward to $1,050-$1,250. Upside momentum will face resistance from the $1,600-$1,800 pressure zone, with the annual average price projected around $1,300 per ounce.

Platinum's scarcity and palladium's surplus diverge; cyclical shifts await careful calibration.

Medium-to-long term outlook: Palladium fundamentals remain weaker than platinum, with the platinum-palladium ratio persisting at low levels. Gradually easing supply contrasts with rising financial attributes, creating divergent market expectations. Compared to platinum, palladium is unlikely to exhibit smoother price movements. The 2026 overseas benchmark contract is projected to trade within $1,250–$1,800.

Supply-demand gap narrows, underscoring supply rigidity

The price drivers for platinum, palladium, and gold differ. Platinum possesses dual industrial and financial attributes, while palladium's industrial role is more pronounced. On the supply side, both metals exhibit significant supply fragility, inherently offering bullish allocation value. On the demand side, platinum's consumption structure is relatively diversified. Benefiting from the prospects of large-scale hydrogen energy development, AI-related consumption growth, and investment premiums driven by the overall precious metals bull market, platinum is projected to experience its fourth consecutive year of supply shortage by 2026, with a deficit of approximately 23 tons. Palladium consumption is 85% concentrated in automotive exhaust catalysts. Due to the ongoing substitution of traditional fuel vehicles by new energy vehicles, palladium's long-term demand outlook is weaker than platinum's. The palladium supply deficit is projected to narrow significantly to around 2 tons by 2026. When both platinum and palladium exhibit stable supply dynamics, their mutual substitutability in industrial applications and automotive exhaust catalysts will provide convergence momentum for the platinum-palladium price spread.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.