Palladium price prediction

The palladium price forecast is difficult to predict. Although it is a very rare precious metal, applications and the geopolitical environment strongly influence the palladium price. Historically, the palladium price followed a similar course to gold with one major difference: when economic uncertainties increase, the palladium price falls. We give you more insight into palladium's price movements and provide an indication of short-term and long-term expectations. 
 

Market analysis palladium

Market analysis of palladium shows that it can rise and fall sharply in price. 20 years ago, palladium was quite cheap at around €3,500 per kilo. Compared to the current price of around €28,600, that seems like a big increase. The real story of the palladium price is more volatile.  
 

Recent palladium price movement

The recent price movement of palladium paints an interesting picture. Over the past five years, the palladium price has gone from a record high to a sharp decline. From 2018, a sharp rise in the palladium price was seen, peaking in 2020 at €72,430 per kilo. After that, the price fluctuated between €46,792 and €76,341. After November 2022, the palladium price started to fall sharply. 
 
2023 proved to be a good year only for gold. Gold rose 13% in price while other precious metals got cheaper. Palladium took the biggest hit with a loss of a whopping 39%. 
 

Influential market factors

There are a number of influential factors on the palladium market, including the geopolitical situation in Russia. Russia accounts for a quarter of palladium production. Due to friction between Ukraine and Russia, investors and the auto industry expected a scarcity of palladium which led to a record price of €76,341 in 2021. There turned out to be no scarcity which caused the price of palladium to correct.
 
Another important factor is the demand for palladium from the automotive industry. 80% of the annual supply of palladium goes to the automotive industry to make catalysts. Depending on developments within this industry, the price could change further. 
 

Short-term expectations for palladium

The short-term expectations for palladium are that the price will continue to fall and that there will be a surplus of palladium. One reason is that demand for platinum from the automotive industry is rising at the expense of palladium. Platinum is currently cheaper than palladium making it more attractive. This may create a surplus of palladium. 
 

Long-term expectations for palladium

In the long term, experts expect the price of palladium to stagnate and possibly rise again. Thereby, it is possible that the auto industry could again benefit from the palladium price drop and switch back from platinum. Thus, the auto industry could buy back the surplus palladium, possibly causing shortages again.  
 
Disclaimer: The Silver Mountain does not provide investment advice and therefore this article should not be considered as such. Past results do not guarantee future results.