After a sizzling start to the year, platinum and palladium have dropped sharply — platinum falling 19% and palladium declining 23% year-to-date, according to a June 22 report from The Hindu BusinessLine. However, both precious metals are expected to regain ground by the end of the third quarter of 2026, analysts at BMI (a unit of Fitch Solutions) and Bank of America said.
Price Performance and Near-Term Levels
Currently, platinum is trading near a six-month low of $1,668/oz, while palladium is near an eight-month low of $1,263.5/oz. The metals have lost steam after gold peaked at $5,608/oz on January 19, said Bank of America. The rally in platinum group metals (PGMs) has lost momentum since late January, largely tracking gold's pullback. Ongoing macro headwinds from the conflict in West Asia add downside risk to industrial metal demand.
Supply and Deficit Outlook
World Platinum Investment Council (WPIC) reported that the platinum deficit this year is forecast at 297,000 oz. Furthermore, above-ground stocks have depleted to just under three months' worth of cover to meet global demand projected by the end of 2026. Bank of America forecasts a shifting PGM market: platinum is expected to see a small deficit this year, while palladium is forecast to see a small surplus.
| Metal | Current Price (oz) | YTD Change | BMI 2026 Average Forecast | Bank of America Q4 2026–H1 2027 Avg Forecast |
|---|---|---|---|---|
| Platinum | $1,668 | -19% | $2,000 | ~$3,000 |
| Palladium | $1,263.5 | -23% | $1,500 | ~$2,200 |
Demand Dynamics and Macro Risks
Bank of America noted a growing divergence in the automotive sector: electric vehicles (EVs) are expected to account for around 40% of total light vehicle production, surpassing internal combustion engine (ICE) vehicles for the first time, with ICE share falling to 36% and hybrids at 24%. Demand for EVs in China outpaces that for traditional ICE vehicles, creating potential volatility for PGM demand since EVs use no PGMs.
BMI highlighted that the PGM market is vulnerable to an oil price shock given its dependence on the automotive sector. High diesel and petrol prices could reduce consumer interest in ICE vehicles and accelerate EV adoption. Additionally, shortages of aluminium, petrochemical derivatives, elastomer feedstocks, helium, and sulphur have impacted the manufacturing sector.
Macro headwinds include inflation concerns, a stronger dollar, and diminished hopes of US Federal Reserve rate cuts. BMI's economists have lowered their 2026 global growth forecast to 2.4% (from 2.8% before the US-Iran conflict began) and increased their global inflation forecast to 4.1% (from 3.1%). They see a 30–40% probability that the US dollar index could appreciate by 5–10% from current levels, creating an additional headwind for precious metals.
Price Forecasts and Outlook
BMI predicts platinum and palladium prices will return to levels above $2,000/oz and $1,500/oz, respectively, by the end of Q3 2026. However, if talks between the US and Iran break down and the conflict escalates further, platinum and palladium could decline by another 10% this year on fears of a global recession. BMI's macro team assigns a 45% probability of the Iran war escalating further.
Bank of America remains bullish on gold into Q4, which it expects will draw investors back into the PGM market and add upward pressure to prices. It forecasts platinum prices to average around $3,000/oz by Q4 2026 and through the first half of 2027, with palladium averaging around $2,200/oz in the last three months of 2026. For 2026 as a whole, BMI expects platinum and palladium to average $2,000/oz and $1,500/oz, respectively.
Sources:
