The tariff conflict initiated by US President Trump has affected the prices of Platinum and Palladium. At the start of the week, Platinum dropped to $900 per troy ounce, its lowest in nearly a year, while Palladium fell to $890 per troy ounce, the lowest in eight months.
Earlier this month, both metals were priced around $1,000. The suspension of most tariffs provided a recovery yet demand remains uncertain due to the automotive industry’s heavy reliance on these metals.
Adjusted Forecasts
Forecasts have been adjusted, with year-end predictions for Platinum lowered to $1,000 and for Palladium to $1,000 as well.
This recent pricing slide in Platinum and Palladium is not just a knee-jerk market reaction but rather a tightening squeeze shaped by shifting industrial expectations and policy moves across continents. When we saw Platinum tumble to $900 per troy ounce earlier this week—its lowest point in nearly twelve months—it was part of a broader retreat influenced by protectionist trade approaches coming out of Washington. Palladium’s decline followed suit, dropping to $890, a threshold not tested since around eight months ago.
Earlier in the month, both metals were holding steadier ground around $1,000 per ounce. There was a brief return of optimism as trade restrictions were trimmed back, leading to a modest rebound. However, that uptick in pricing was not underpinned by stronger fundamentals. The pullback since then reflects a market that’s now more cautious, especially given the frailty of automotive sector demand which remains central to both commodities.
Markets appear to be recalibrating—forecasts have been edged down as a result. While we’re now looking again at year-end projections circling $1,000 for each metal, this is more a ceiling than a baseline if global auto production remains faint. Palladium, often leaning more on petrol engine catalysts, may face sharper exposure if regulatory pressure shifts or vehicle demand sags in key regions like Europe or East Asia.
Trading Strategies and Signals
For those dealing in derivatives, fluctuations of this kind offer two things above all—opportunity and volatility. Since the downward revision of forecasts is anchored in softening demand within a specific industrial sector, rather than a change in geological supply flows, we should be hesitant to treat current levels as a new floor. There’s room for further weaknesses if upcoming manufacturing data or trade announcements reduce forward visibility for automakers.
Wilkinson’s earlier commentary on trade friction mapped out more than just a short-term correction—it pointed to a hesitancy among manufacturers to commit to bulk orders of catalytic materials. This hesitation filters through directly to the metals market with a narrowing of positions and shorter holding durations. Patel’s recent adjustment to institutional forecasts reflects that same cautious tone—bullish bets are being restructured with tighter risk thresholds and quicker expiry terms.
Given the recent price compression, we may expect continued changes in implied volatility. There’s little supporting evidence that physical demand will restore confidently in the coming fortnight. Without a material improvement in vehicle ordering patterns or a breakthrough in trade alignment, we should view any continued pricing recovery as likely temporary.
From a trading strategy point of view, it may be more prudent to keep shorter-dated positions on watch and reconsider the weighting of bull spreads until more concrete signals arrive. Leverage levels are best kept measured. We’ve seen what happens when geopolitics overrides seasonal demand.
