Platinum's 2026 Bull Run vs Palladium's Downside Risk: What Metals Focus Predicts

The precious metals rally isn’t treating all metals equally in 2026. While platinum is set up for another strong year, palladium faces a tougher outlook ahead.

The 2025 Scorecard: Platinum Crushes Palladium

Both metals have had a stellar 2025, but platinum’s performance stands out. The metal hit US$1,725/oz in October—up 90% year-to-date—and is trading at 12-year highs. Palladium, meanwhile, climbed 80% to US$1,630/oz but has already pulled back to US$1,430, sitting at just a 2-year high. The gap reveals a fundamental difference: platinum has real structural tailwinds; palladium doesn’t.

Why Platinum Has Real Legs

It’s not just riding gold’s coattails. According to Metals Focus’ latest report:

• Supply squeeze: Southern Africa faces production outages and heavy rainfall, while North America is restructuring. Result? A 415,000-ounce supply deficit expected in 2025, growing to 480,000 ounces in 2026.
• Mine production cliff: Output falling to 12-year lows (excluding 2020) with few new projects on the horizon after years of underinvestment.
• Demand boost from China: Jewelry demand surging as platinum becomes an attractive alternative to pricey gold. ETF inflows also climbing.

The 2026 forecast: US$1,670/oz average, up 34% year-over-year. That’s the kind of price action driven by structural supply shortfalls, not just sentiment.

Palladium: The Structural Problem

Metals Focus is bearish for good reason. While the palladium market remains in deficit, that cushion is shrinking fast: from 566,000 ounces (2024) to 178,000 ounces (2026). Meanwhile:

• Mine supply drops 3% in 2026
• Recycling recovery pushes secondary supply up 10%
• Net result: 1% total supply growth while demand sinks 1%

The price call: US$1,350/oz by Q4 2025, sliding to US$1,150/oz by Q4 2026. That’s a 15% downside from current levels—a far cry from platinum’s momentum.

The kicker? EV adoption slowdown means auto makers are shifting back to palladium for catalytic converters (cheaper than platinum), but demand still can’t absorb the incoming supply.

Investment Takeaway

2026 is a tale of two stories: platinum has structural supply constraints meeting rising jewelry and industrial demand (especially from China). Palladium is stuck in a shrinking deficit with weakening automotive demand. For precious metals bulls, platinum looks like the play; palladium? More of a shorts setup.