In the hierarchy of precious metals, palladium has always been the overlooked sibling. Gold is the safe haven. Silver is the speculative favorite. Platinum is the industrial workhorse. But palladium? That's the metal most investors couldn't pick out of a lineup.

Which makes its performance over the past year all the more remarkable.

Palladium rose to $1,936.50 per troy ounce on Monday, up 3.53% on the day and extending a rally that has delivered 107.78% gains over the past 12 months. In January alone, the metal has surged 19.39%—a performance that would be headline news if anyone were paying attention.

The Comeback Nobody Expected

To understand palladium's resurgence, you have to understand its collapse. The metal peaked above $3,000 per ounce in early 2022 as supply chain disruptions and Russian sanctions (Russia supplies about 40% of global palladium) sparked panic buying. Then came the crash: palladium fell below $900 in late 2024, losing more than 70% of its value.

What changed? Several things, all at once.

1. Supply Constraints

Russia remains the world's largest palladium producer, and ongoing geopolitical tensions have complicated supply chains. While direct sanctions on Russian palladium have been limited, buyers in Western markets have increasingly sought alternative sources—creating bottlenecks and premiums.

2. Automotive Demand Recovery

Palladium's primary use is in gasoline vehicle catalytic converters, which reduce harmful emissions. After years of speculation that electric vehicles would destroy palladium demand, the reality has proven more nuanced. Global auto production has recovered, and the EV transition is proceeding more slowly than expected—particularly in markets like the United States where pickup trucks and SUVs dominate.

3. Substitution Limits

During the 2021-2022 price spike, automakers accelerated efforts to substitute cheaper platinum for palladium in catalytic converters. But technical limitations have constrained this substitution, and both metals are now rallying together.

"The palladium market has moved from surplus concerns to deficit realities faster than anyone expected. The supply response to lower prices never materialized, and now we're seeing the consequences."

— Philip Newman, Metals Focus

Geopolitical Tailwinds

Beyond fundamental supply-demand dynamics, palladium has benefited from the same geopolitical catalysts driving other precious metals higher:

  • Venezuela regime change: The capture of President Maduro sparked safe-haven buying across the precious metals complex
  • Iran protests: Escalating civil unrest in OPEC's fourth-largest producer has elevated commodity risk premiums
  • Fed independence crisis: The DOJ investigation into Chair Powell sent investors scrambling for hard assets

Palladium, despite being primarily an industrial metal, has captured flows that in past crises went exclusively to gold.

Comparing the Precious Metals

Here's how palladium's 2026 performance stacks up against its peers:

  • Palladium: +19.39% in January, +107.78% year-over-year
  • Silver: +5% in January, +149.1% year-over-year
  • Platinum: +40% in January, +121.8% year-over-year
  • Gold: +7.15% in January, +72.96% year-over-year

While silver and platinum have delivered stronger absolute returns, palladium's recovery from its 2024 lows represents the most dramatic reversal in the precious metals space.

The Hydrogen Wild Card

Like platinum, palladium has potential applications in the emerging hydrogen economy. While platinum is the preferred catalyst for most fuel cell applications, palladium can serve as a lower-cost alternative in certain configurations. Any acceleration in hydrogen adoption could create new demand sources that current forecasts don't fully capture.

Investment Considerations

For investors considering palladium exposure, several factors merit attention:

Pros

  • Supply constraints likely to persist
  • Automotive demand more durable than expected
  • Still below 2022 highs despite recent rally
  • Portfolio diversification benefits

Cons

  • Highly volatile—can move 5%+ in a single day
  • Long-term EV transition remains a demand risk
  • Concentrated supply (Russia, South Africa) creates geopolitical exposure
  • Limited investment vehicles compared to gold or silver

How to Invest

Options for palladium exposure include:

  • Physical bullion: Available from major mints, though premiums are high
  • ETFs: Aberdeen Standard Physical Palladium Shares ETF (PALL)
  • Mining stocks: Sibanye Stillwater, Anglo American Platinum, Norilsk Nickel (Russian exposure)

The Outlook

Metals Focus, a leading precious metals consultancy, projects palladium prices will face headwinds in the second half of 2026 as substitution efforts gain traction and EV adoption accelerates. But for now, the market remains tight, and momentum favors the bulls.

"Palladium's rally has been remarkable given where sentiment was just 18 months ago," said Menke of Julius Baer. "Whether it can sustain these levels depends on whether the automotive story holds together."

For investors who dismissed palladium as a busted trade after its 2022 collapse, the metal's 107% recovery serves as a reminder: in commodities, nothing stays down forever.

The question now is whether palladium's quiet explosion will finally get the attention it deserves—or whether it will remain precious metals' best-kept secret.