Between early April and mid-October 2025, platinum and palladium prices soared, achieving gains of around 90%.
This massive jump was part of a broader precious metals rally that also included gold and silver. The rally appeared to be primarily driven by investors turning to assets that central banks cannot print or digitally create. Key factors driving this demand included persistent inflation exceeding targets, central bank interest rate cuts despite high inflation and large global budget deficits.
Unique Drivers of Outperformances
While macroeconomic factors fueled the overall rally, platinum and palladium's outperformance suggests specific market dynamics were at play. The two metals may have been undervalued relative to gold and silver because platinum and palladium had underperformed in recent years.
Their uses in catalytic converters for automotive engines were a key reason for this underperformance:
Platinum – predominantly used in diesel engines – has been the big underperformer over the last 18 years as consumers shifted first toward gasoline engines, then to hybrid and electric vehicles more recently.
Palladium – primarily used in gasoline engines – has underperformed as EV sales surged in places like the U.S. and China. In 2024, EVs accounted for 11.5% of all vehicle sales in the U.S. and around 48% in China.
Amid the downward pressure from changing automotive trends, the metals' prices seemed to reach a point of extreme undervaluation relative to gold and silver. This perceived valuation gap drew significant investor attention over the past seven months. This heightened interest helped push prices to a local high in mid-October 2025, followed by a slight correction.
With gold and silver reaching record highs this year, platinum and palladium could be potential portfolio diversifiers for investors seeking exposure to precious metals.
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