What is the outlook for platinum investment? Price forecast for 2025 and analysis of trading mechanisms

Palladium Market Status: Investment Opportunities Amid Supply and Demand Imbalance

Palladium is a rare metal with stable properties and excellent hardness, mainly used in the automotive industry, electronics, dentistry, and metal alloys. Among these, 80%-85% of demand comes from automotive catalytic converters, making it the primary demand source.

As a key catalyst for controlling emissions in gasoline vehicles, palladium in traditional cars is almost impossible to fully replace with other metals. However, in recent years, the world’s largest palladium supplier, Russia, has seen its reserves decline continuously. South Africa’s production capacity has been limited due to power crises and strikes, leading to structural supply bottlenecks. This supply constraint, combined with industrial demand fluctuations, makes palladium an investment asset with short- and medium-term trading opportunities.

2025 Palladium Price Trend Analysis

As of June 2025, palladium prices are generally showing a weak oscillation pattern. Starting the year at $1,140/oz, it surged to $1,260 in March, then fell back to the $1,030-$1,080/oz range in May due to rising global electric vehicle penetration (22-25%) and sluggish traditional car sales, with a decline of over 10% for the year.

Core factors influencing the second half of 2025 include:

Structural demand weakening — According to the International Energy Agency, the continuous rise in electric vehicle share is eating into the demand for traditional automotive catalysts. Slowing car sales in Europe and China further pressure industrial palladium demand.

Relatively stable supply landscape — Despite geopolitical sanctions, Russia continues to maintain exports through alternative channels; improvements in South Africa’s power situation are gradually restoring mining capacity.

Shift in safe-haven capital flows — Investors are increasingly favoring gold and silver as safe assets, marginalizing palladium due to its industrial nature. ETF holdings and net futures long positions continue to decline.

According to research institutions’ forecasts, under a baseline scenario (stable supply, global GDP growth of 2.5%-3%), the average palladium price will fall within $1,050-$1,150/oz. If prices reach the long-term support level of $900, a rebound may occur; if Russia’s exports are hindered, South African mines face difficulties, or breakthroughs in hydrogen energy applications occur, short-term challenges of $1,300-$1,400 are possible. Conversely, if China’s and Europe’s car markets weaken further or the US dollar remains strong, palladium could fall below $1,000, testing the $900-$950 support zone.

Historical Price Trajectory of Palladium

2017-2019 Bull Market — Stricter emission regulations worldwide (such as China’s “China VI” and EU’s “Euro 6”) led to a surge in demand for palladium in catalytic converters. Prices rose rapidly from $730/oz at the start of 2017 to $1,900/oz by the end of 2019, a cumulative increase of over 160% over three years.

2020 Pandemic Shock and Rapid Recovery — COVID-19 impacted the global automotive industry, causing palladium prices to dip to $1,460/oz. However, with fiscal and monetary stimulus measures worldwide, the automotive sector rebounded quickly. Slow restart of South African mines and logistics disruptions contributed to a strong rally in 2021, with a peak of $3,017/oz in May.

2022 Volatility — The Russia-Ukraine war triggered supply concerns, pushing palladium prices to a short-term high of $4,440/oz. Subsequently, expectations of reduced catalytic converter demand due to rising electric vehicle adoption and global economic slowdown caused prices to decline sharply from the peak.

2023-2025 Structural Adjustment Period — Palladium fluctuated within $1,500-$2,200/oz, reflecting deep uncertainties on both supply and demand sides.

Why Is Palladium Worth Attention? Investment Advantages

Inflation Hedge — Like gold, palladium is priced in USD. When the dollar depreciates, palladium prices tend to rise, providing inflation protection.

Rigid Industrial Demand — Over 80% of palladium is used in automotive catalytic converters, a demand that is difficult to replace in traditional gasoline vehicles, supporting its fundamental value.

Large Price Volatility Space — Compared to the relatively stable gold and silver, palladium reacts more intensely to supply and demand changes, with significant price swings and sensitive technical signals, offering ample opportunities for short- and medium-term trading.

Supply Constraints Supporting Upside — Stagnant production capacity in Russia, power crises and strikes in South Africa, combined with ongoing automotive industry demand, create supply gaps that support higher prices.

Comparison of Palladium Trading Methods: Advantages of CFDs

Palladium can be traded mainly through three methods: physical ownership, futures contracts, and Contracts for Difference (CFDs).

Futures Trading requires higher capital and has fixed delivery dates, necessitating closing or rolling over positions at expiry, which can be cumbersome.

CFD Trading tracks the spot price movements without owning the physical palladium. Compared to futures, CFDs offer:

• Low trading thresholds, starting from 0.1 lot
• No fixed delivery date, flexible holding periods
• 24-hour trading, no market open/close restrictions
• Margin trading support, allowing both long and short positions
• Risk management tools like stop-loss, take-profit, and negative balance protection
• No physical asset ownership needed, leverage amplifies trading results

Basic Process of Trading Palladium CFDs

Preparation Stage — Choose a reputable CFD broker, complete account registration and deposit funds, and verify identity.

Analysis Stage — Use technical analysis tools (e.g., moving averages, RSI) combined with fundamental analysis to judge palladium price trends and determine entry points. Focus on USD trends, car sales data, electric vehicle penetration, geopolitical developments, etc.

Order Placement Stage — After deciding on the trading direction, set trade size, leverage, stop-loss and take-profit levels, and submit the order. Traders can monitor position profit/loss in real-time and close positions to realize profits or cut losses at appropriate times.

Summary of Palladium Investment

Palladium combines safe-haven attributes with solid industrial demand, and its volatility makes it suitable for professional traders. In the second half of 2025, structural demand weakening will dominate price movements, but stable supply and geopolitical risks offer rebound potential. Short-term forecast ranges from $1,050-$1,150/oz, with technical support at $900 and resistance at $1,300-$1,400.

For investors willing to accept volatility and seek short- to medium-term trading opportunities, palladium CFDs provide a flexible and efficient way to participate, with lower barriers and dual-direction trading advantages over traditional futures. It is recommended that investors conduct thorough fundamental and technical analysis and develop clear risk management plans before trading.