Palladium fundamentals are expected to weaken slightly in 2025, weighed down by oversupply and lower demand from the automotive sector.
Since reaching an all-time high of $3,002 per ounce in February 2022, palladium has experienced a continuous downward trend.
More than 80 percent of demand for the platinum group element (PGE) comes from the automotive sector.
There it is used in the production of catalytic converters, but high prices caused parts manufacturers to reduce the amount of palladium in their products in favor of its cousin, platinum PGE, which is traded at lower prices.
Although the price of palladium has fallen and even stabilized in 2024, it still trades at a premium to platinum: $953.50 per ounce versus $932.70 on January 15, 2025.
For most of 2024, the metal traded in the $900 to $1,100 range, but experienced a short-term spike to $1,200 in October when the U.S. Treasury called for tighter sanctions on Russian precious metals. Russia is one of the world's leading suppliers of palladium and other precious metals.
Given its dependence on the automotive sector, what does it mean for palladium that more automotive companies are transitioning from internal combustion vehicles (ICE) to electric vehicles (EV) and hybrids?
What factors will affect palladium in 2025?
In CPM Group's Gold and Silver Outlook 2025 report , Jeffrey Christian, the firm's CEO, said he expects both platinum and palladium to remain range-bound in 2025, albeit with a downward bias.
That bias is expected to be more pronounced for palladium due to weakening demand from the automotive sector.