Platinum Palladium Prices Surge 20% Due to Supply Constraints and Industrial Demand

Platinum and palladium, two of the world's most precious metals, are poised for a significant price surge due to their limited supply and increasing demand. The annual mining output of these metals is extremely constrained, with only around 200 tonnes of each being extracted yearly. This scarcity is a key driver behind the anticipated price increase, as the supply is insufficient to meet the growing demand.

In the first half of 2025, precious metals, particularly platinum and gold, dominated the market. This dominance was fueled by supply constraints, safe-haven demand, and increased purchases by central banks. The demand for these metals is expected to continue rising, further driving up their prices. Gold, which has traditionally been a safe-haven asset, is now facing competition from silver, platinum, and palladium. Central banks have slowed down their bullion purchases, which has led to a shift in investor preferences towards these other precious metals. The future of gold prices is closely tied to the economic policies of the United States, particularly in relation to trade negotiations and inflation.

Platinum and palladium have shown resilience in the face of market volatility. While gold prices have fluctuated due to mixed messages from the US regarding trade negotiations, platinum and palladium have maintained their upward trajectory. This stability is a testament to the growing demand for these metals, which are used in a variety of industrial applications, including automotive catalysts and jewelry. The price of platinum has reached its highest level in over a decade, while palladium has also seen significant gains. This price surge is a result of the limited supply and increasing demand for these metals. Analysts predict that this trend will continue, with platinum and palladium prices potentially reaching new highs in the coming years.

The demand for platinum and palladium is expected to remain strong, driven by their use in industrial applications and as investment assets. The limited supply of these metals, coupled with the growing demand, is likely to result in a significant price increase. Investors are advised to consider adding these metals to their portfolios as a hedge against market volatility and inflation. The trend of appreciating precious metals is at work, but there is also the theme of ‘strategic and critical metals’ anxiety pushing platinum. On top of that, under the hood, is AI – not the AI under the hood of cars, but AI as a core driver of market moves. AI means that the internal combustion engine is not going away because the implied future demand for energy is now infinite. This is because the demand for AI is infinite, and AI depends heavily on silicon and pure energy consumption. As such, all forms of energy will be utilized, which is why, if you wondered, nuclear energy is no longer the scourge of humanity and back in favor like it was in the 1950s. As the world continues to burn carbon-based fuels alongside all the other energy-generating materials, you better have platinum to try to clean up the mess. You also better have palladium.