The price of palladium is expected to bounce in 2025 from deeply oversold levels.
This palladium prediction for 2025 suggests that palladium will follow gold higher in 2025. The most bullish palladium price prediction for 2025 and 2026 is $1,770.
Table of contents
We look at the following topics in this palladium forecast. Readers who are only interested in the specific palladium predictions for 2025, not in the research, may scroll down to the bottom to find our best case and base case palladium forecast 2025.
- The importance of palladium as a physical metal
- The importance of palladium as portfolio diversification
- The long term palladium chart vs. other precious metas
- The wild nature of palladium with a history of big moves
- The correlation between palladium and gold
- Physical palladium market supply/demand
- Palladium prediction 2025 – summary
1. The importance of palladium as a physical metal
Palladium’s physical importance stems from one crucial fact: it’s 30 times rarer than gold. This isn’t just a statistical figure – it’s a fundamental driver of palladium’s strategic position in global manufacturing.
Let’s break down the key physical attributes that matter:
- Exceptional malleability allowing sheets as thin as one-two hundred fifty thousandths of an inch
- Superior durability (12.6% harder than platinum)
- Unique catalytic properties crucial for automotive emissions control
- Critical role in multiple high-tech applications
The automotive sector represents the cornerstone of palladium demand. Each catalytic converter requires between two to seven grams of the metal, creating a consistent demand base that can’t easily be substituted.
Take-away – Palladium’s physical properties, combined with its concentrated supply sources (Russia, South Africa, Canada, US), make it irreplaceable in modern manufacturing. This creates a solid foundation for long-term value preservation.
2. The importance of palladium as portfolio diversification
Palladium offers something unique in the investment world – it’s both a precious metal and an industrial powerhouse. This dual nature creates distinct market dynamics that set it apart from traditional investment assets.
Let’s examine the key investment characteristics:
- Proven track record of price independence
- Historical volatility providing strategic entry points (from $41.70 in 1977 to $2,981 in 2022)
- Multiple investment vehicles available (physical bullion, ETFs like SPPP and PALL)
- Natural hedge against both industrial and precious metals market cycles
The concentrated supply sources add another layer of strategic importance. With production primarily from Russia, South Africa, and North America, palladium provides natural exposure to geopolitical dynamics.
Take-away – For portfolio managers seeking precious metals exposure, palladium offers unique diversification benefits. Its industrial demand creates different price drivers and market cycles compared to purely monetary metals like gold, making it a valuable component in a well-diversified precious metals strategy.
3. The long term palladium chart vs. other precious metals
Start with the chart.
Always.
The longest timeframe of the palladium price chart has a clear message.
It’s a major bottom.
The long term palladium price structure is clear, the rising trendline is clear. No PhD needed to ‘read’ the palladium chart.
Chart-wise, palladium is simply working on a long term uptrend:
- After an enormous drop from $3,300 to $830, it really seems time for palladium to bottom out.
- Bottoming formations take time. They are bottoms until they result in a new trend. The most likely trend is higher. The ‘line in the sand’ on the palladium chart is clear- the rising trendline should be respected on a 3-month closing basis (as this is a monthly candlestick chart).
- Palladium is known for its wild swings, really big moves, in both directions. Consequently, this comes with buy the dip and also take profits opportunities, when looked at palladium over the long term.
Take-away – For as long as palladium respects support, it looks like bargain for long term investors. The most obvious target, provided the secular rising trendline holds, is $1,770, followed by $2,220.
Moreover, when compared to the other precious metals, palladium clearly has a solid position. It also has its own rhythm, as evidenced by the precious metals chart shown below.
4. The wild nature of palladium with a history of big moves
Palladium is known for its big swings.
It leaves major moves on its long term chart.
As seen above, palladium has experienced different types of large swings:
- 2006 – 2011: Steep rise, followed by a quick and steep drop, followed by another major rise.
- 2016 – 2020: Slow but very significant rise.
- 2022 – 2023: Steep correction.
Take-away – Palladium should be looked at as a long term investment, not a short term trading vehicle. Most gains are made on the long term. Investors must have a plan to protect against drops while leveraging the long term upside potential that palladium has to offer.
5. The correlation between palladium and gold
While palladium is directionally correlated with all precious metals, it seems to have the strongest positive correlation with gold.
The next chart, showing both palladium (candlesticks) and gold (line), over a period of 40 years, makes is it crystal clear – gold and palladium are strongly correlated on the long term with limited exceptions.
Which exceptions have we witnessed over the last 40 years?
- Around the change of the century, palladium started an epic rally while gold was bottoming out.
- In 2023, gold started moving higher after printing a bottom while palladium came down a lot.
The latter was an obvious evolution as palladium rose nearly 30x between 2008 and 2022. It was a natural, and healthy, evolution to retrace.
Going forward, with gold’s bull market now confirmed, it seems a no-brainer evolution for palladium to slowly but surely track gold in its long-term uptrend.
As explained by this gold forecaster there is plenty of data confirming gold’s secular bull market.
Take-away – It is fair to say that gold is set to move higher, creating bullish intermarket dynamics for palladium. This increases confidence that palladium is set to bounce from deeply oversold levels. The $1,770 palladium price prediction for 2025 and 2026 seems to be a reasonable price target, given the volatile nature of palladium. Invalidation: a drop below the long term rising trendline on the palladium chart.
6. Physical palladium market supply/demand
Next up is the physical palladium market.
We consult World Palladium Investment Council (WPIC), a specialist in analyzing the physical palladium market.
Their latest research suggests that palladium did enter a period with a supply deficit.
Based on their palladium forecast of the physical market, 2024 would mark a severe supply deficit while 2025 a smaller deficit.
Below is the palladium market prediction for 2025 and beyond, particularly physical demand and supply data, on aggregate level.
What’s odd, looking at this palladium forecast, is that the palladium price dropped so steeply in 2024 even though a supply deficit was in the making.
In our view, there is one, and only one, explanation for this – it’s the chart.
The support level around the secular rising trendline was an obvious target, also an obvious ‘buy the dip’ area.
Remember, charts always prevail against fundamentals, also in the precious metals market.
Take-away – Long term palladium predictions truly depend on the level of demand for 2026 and 2027. If demand is under-estimated, especially from automotive, for that time period, it would be the most bullish imaginable environment for palladium. The opposite is true as well – if demand is soft from automotive, palladium will benefit from the gold bull market but not as much from physical demand.
7. Palladium price prediction 2025 – a summary
Now, let’s combine the data points we presented in this research:
- The physical palladium market entered a two-year period with a supply deficit. This should be a catalyst for an epic bottom in palladium prices.
- Precious metals intermarket dynamics: the long term gold bull market is expected to continue several more years. This should support palladium to move higher, directionally, in 2025 and beyond. It’s THE most important catalyst for this palladium price prediction.
- Physical palladium demand is primarily driven by the automotive sector. The physical palladium market forecast is based on soft demand in automotive. However, if this turns out to be a conservative forecast, palladium will have another catalyst.
All of the above are visible on the palladium price chart.
Combining all the data points and mapping them to reasonable palladium price predictions for 2025 and beyond:
- Base case – palladium price prediction of $1,770 in 2025 or 2026. Catalysts: gold’s bull market and soft demand for physical demand.
- Best case – palladium price prediction of $2,220 in 2026. Catalysts: gold’s bull market and better-than-anticipated demand for physical demand coming out of the automotive sector.
Because of this, it is fair to say that a strong bounce in the palladium price to $1,770, in the next 12 to 24 months, is reasonable to expect.
Invalidation of the bullish case: a drop below the secular rising trendline for at least more than 3 months.
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