Palladium is not physically "running out" in the sense of total geological extinction, but it is facing chronic, long-term supply deficits due to geographic concentration and mining challenges. Supply is heavily reliant on Russia and South Africa, making it vulnerable to sanctions and logistical disruptions.
Palladium's supply-demand balance has been in deficit for more than a decade. According to Johnson Matthey's latest PGM report (May 2025), annual demand consistently exceeded supply by roughly 5–9% of total consumption in 2023-2024.
Although the palladium market has been in a physical deficit for the past few years, that deficit is expected to shrink from 566,000 ounces in 2024 to 367,000 ounces in 2025 before narrowing even further to 178,000 ounces in 2026.
BullionVault's palladium forecast reports that its user survey indicates a December 2026 price expectation of around $1,689 per ounce. This compares with an LBMA analysts' 2025 average of $991 and a December 2025 LBMA average of $1,586.
Palladium has one notable characteristic working in its favor compared to other precious metals. It's much rarer than gold or silver, which can potentially drive up the price through imbalances in supply and demand. The downside, however, is that palladium prices tend to be more volatile than gold or silver prices.
A major source of health concern is the sensitization risk of Pd as very low doses are sufficient to cause allergic reactions in susceptible individuals. Persons with known nickel allergy may be especially susceptible. Workers occupationally exposed to Pd include miners, dental technicians and chemical workers.
Platinum's investing demand, in contrast, equals just 10% of silver investment demand. The metal remains new and little-known as a financial asset with limited investment product availability to meet latent and pent-up demand.
After hitting a seven-year low at $31.74 per gram at the start of 2025, palladium staged a sharp recovery and gained 74.48% over 2025. Even with this rebound, prices today remain well below the highs seen in 2021, suggesting that the metal still has room to move higher as the market normalises.
The world's leading producers are Nornickel (Russia), Implats (South Africa), Anglo American Platinum (South Africa), Sibanye-Stillwater (South Africa & USA), and North American Palladium (Implats) in Canada. These five accounted for over 60% of total production in 2025.
Of the two metals, platinum is stronger than palladium, but again both metals are strong enough to be used for engagement rings or wedding rings that are worn daily.
China is the world's largest consumer of platinum group metals, but is highly dependent on imports, exposing domestic companies to risks from international price swings and supply chain insecurity. Imports of platinum and palladium reached 91.1 tons last year, accounting for 71 percent of the country's total supply.
In many industries, palladium is thought of as a substitute for platinum because of its greater abundance. Although the actual amount of available palladium is unclear, palladium is historically a greater bargain when buying for industrial purposes, as it has previously sold for nearly half as much as platinum.
In 2025, the palladium price soared by more than 83 percent as of mid-December on supportive demand signals from slowing electric vehicle (EV) adoption trends and concerns about Russian supply reliability. The price of the metal reached a year-to-date high of US$1,675.50 per ounce on December 17.
This has come about primarily because although platinum is far, far rarer than gold; its price is far more volatile. Platinum is a precious metal with a high economic value, however, and is comparable to gold. It's about thirty times rarer than gold, has a higher density, and is typically presented in purer form.
Palladium is a precious metal, so it may be believed to be a safe-haven or inflation-hedge similar to gold.
Analysts' XPT Price Projections for 2028
By 2028, platinum prices may stabilize in the $2,500–$3,000 range. This would be driven by a balance between supply and demand, as well as expected global economic growth. However, geopolitical risks and currency fluctuations could alter expert forecasts.
Should You Own Palladium? Palladium may be a worthwhile addition to your precious metal holdings, but it depends on your investment goals. Some people build entire precious metals portfolios without any exposure to palladium, while others find it a valuable inclusion.
Palladium is regarded as of low toxicity, being poorly adsorbed by the body when ingested. It may cause skin, eye or respiratory tract irritation, may cause skin sensitisation. Liquid may cause burns to skin and eyes.
Supply Constraints Add to Bullish Outlook
Russian mining powerhouse Nornickel, responsible for the bulk of global palladium production, expects a 200,000-ounce deficit in 2025 when including investment demand. For 2026, the company projects a 100,000-ounce shortfall, excluding investments.
The automotive sector is the primary end user of palladium. The metal is a key component in the catalytic convertors of internal combustion engine vehicles, where it is used to reduce emissions. Like platinum, palladium is used in jewelry and valued as an investment.
Platinum prices drop due to weaker industrial demand (especially from autos after the VW scandal), a stronger U.S. dollar, profit-taking after rallies, and a shift from diesel vehicles, despite ongoing tight supplies, though its use in green tech like hydrogen fuel cells offers long-term support. Major price drops often follow economic uncertainty, and while recent volatility occurred, underlying supply issues persist.