The price of Platinum increased by 5.6% in a single day, reaching $1,090 per troy ounce, its highest in nearly a year. Concurrently, Palladium surged by around 8% to just over $1,055 per troy ounce, marking a 3½-month high.

Market forecasts indicate a supply deficit for Platinum group metals, though demand is anticipated to decrease in certain sectors. Despite price spikes in previous months, these rises were short-lived.

For sustained price increases in Platinum and Palladium, reduced uncertainty in tariff policy is necessary. Currently, these metals remain relatively inexpensive compared to Gold, with a price ratio of over 3:1 against Gold.

That sharp move higher in Platinum—a 5.6% rise in a single session—is a reaction to supply-side concerns resurfacing. Markets are re-evaluating shortages within the Platinum group metals (PGMs), amplified by recent data suggesting a production lag. With the price crossing $1,090 per troy ounce, the reaction could be more than just speculative buying; it shows how quickly sentiment shifts when fundamentals come back into focus.

Palladium’s bounce, climbing 8% to over $1,055, is even more abrupt. This places it at levels not seen for three and a half months. The driver for this is largely rooted in the same narrative: tighter-than-expected output and mild optimism about a rebound in auto-sector usage. However, the same forecast warns of slowing demand across specific uses—namely catalytic converters, given the pivot towards electric vehicles. That shift won’t be immediate, but it puts a cap on sustained upward pricing unless production narrows considerably.

While the moves are commanding, it’s worth recalling that this is not the first time in recent quarters we’ve seen snap rallies. These bursts have tended to fade once positioning equalised. Short-term speculative flows likely amplified the current advance, especially considering that both metals trade at deep discounts to Gold—over three times cheaper, to be exact.

Policy remains a tight lid on broader trends. In particular, uncertainty around trade tariffs continues to distort medium-term valuation for industrial metals. Without more clarity on how key economies—China and the US in particular—will treat upstream resources, the resurgence in PGMs might struggle to hold.

If we look through the lens of options volume and implied volatility, past sessions show a pick-up in both. This suggests hedging rather than directional conviction. The skew in shorter maturities has flattened slightly, a sign that upside bets are being calibrated, not chased.

Given this, focusing purely on spot moves without watching the structure of forward curves or risk reversals may leave traders blindsided. What matters now is how sustained this squeeze becomes. If backwardation widens or deferred contracts begin to catch up, that would signal a genuine repricing of supply expectations.

Johnson Matthey’s recent forecast of a running deficit in 2024 for Platinum adds more weight. However, with automotive demand lagging, participants would do well to differentiate between investment flows and real sector pull. There’s also the matter of inventory drawdowns—invisible stockpiles may buffer markets longer than futures curves imply.

As we review these developments, we’re alert to signs that physical demand in the Asia-Pacific region—especially from end users in Japan and South Korea—might carry more influence than previously weighted. A modest pick-up there could re-anchor prices even if recycled feedstock meets part of the gap.

Overall, prices have moved above recent resistance levels, pushing through technical thresholds. Yet, positioning around those levels hasn’t seen the follow-through one might expect if the market were bracing for an extended rally. Caution may stem from lingering doubts about macro data out of Europe too, keeping hands light.

In this kind of environment, emphasis needs to be placed not only on chart triggers but also on revised estimates of auto catalyst launches and refinery outputs. Traders attuned to those shifting gears will be best placed to respond quickly to either continuation or retracement in the days ahead.