Key Moments
- UBS raised its platinum price forecasts by $300 per ounce after the metal surged nearly $500 over four weeks to a 17-year high.
- Meanwhile, UBS lifted palladium forecasts by $100 per ounce as market conditions tightened and the metal traded at a $250 discount to platinum.
- In addition, UBS flagged policy uncertainty and potential tariff outcomes as key drivers of near-term volatility for both metals.
UBS Repositions Price Targets for Platinum and Palladium
Investing.com — UBS updated its price outlook for platinum and palladium after sharp gains in both metals.
Platinum climbed to a 17-year high, rising nearly $500 per ounce over the past four weeks. UBS strategists Giovanni Staunovo and Wayne Gordon linked part of the rally to investor reaction to the European Commission’s plan to ease its 2035 ban on combustion engine vehicles.
As a result, slower-than-expected electric vehicle adoption has strengthened expectations that platinum demand for autocatalysts could remain firm for longer.
Platinum Rally Brings Substitution Risk Into Focus
Against this backdrop, UBS raised its platinum forecasts by $300 per ounce, citing stronger investment demand and tighter market conditions.
However, the strategists also struck a cautious tone. They noted that as platinum prices rise further, automakers may increasingly switch back to palladium in gasoline vehicle catalysts.
“If platinum stays significantly more expensive than palladium, we expect the car industry to revert to palladium,” the strategists said.
This substitution risk has become more pronounced because palladium currently trades at about a $250 per ounce discount to platinum.
Palladium Market Shows Unexpected Tightness
Meanwhile, palladium has staged a strong recovery, climbing to levels last seen nearly three years ago.
Staunovo and Gordon said the palladium market appears tighter than previously expected. Renewed investment interest and supply-side constraints have supported prices.
In particular, they cited comments from Russian producer Nornickel. The company noted that high lease rates pushed some chemical and glass manufacturers to shift from leasing metal to outright purchases, further tightening supply.
Even excluding investment flows, UBS pointed to Nornickel’s view that the palladium market is balanced this year and could move into a small deficit next year.
Forecast Revisions and Policy Risks Ahead
Given these factors, UBS increased its palladium price forecasts by $100 per ounce.
At the same time, the bank warned that policy uncertainty could drive short-term volatility. Investors are closely watching the outcome of the U.S. Critical Minerals Section 232 investigation and a related antidumping petition.
However, UBS added that if tariffs are not imposed, platinum and palladium bars shipped to the U.S. could be re-exported to Europe. Such flows could ease supply pressures in key hubs like London and Zurich.
Platinum and Palladium Changes at a Glance
| Metal | Recent Price Move | UBS Forecast Revision | Key Factors Highlighted by UBS |
|---|---|---|---|
| Platinum | Up nearly $500/oz in four weeks to a 17-year high | Forecast raised by $300/oz | Strong investment demand, tighter market, slower EV uptake, policy shift on combustion engines, substitution risk |
| Palladium | Rallied to near three-year highs; ~$250/oz discount to platinum | Forecast raised by $100/oz | Improving investment demand, supply constraints, high lease rates, balanced-to-deficit outlook |
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