Beyond Gold & Silver: Palladium’s rally faces auto headwinds
Palladium has been profiting from easier macro conditions and fundamental drivers in the auto sector but the metal remains far away from its 2022 highs
In the shadows of gold and silver another metal has been thriving in recent weeks. Palladium (XPD/USD) is up 26% since the start of the month, adding up to almost 70% since the lows back in April. However, unlike gold and silver, it is far away from its all-time high of $3,440 seen back in 2022.
Palladium (XPD/USD) daily chart
Past performance is not a reliable indicator of future results.
Macro and fundamental drivers
Palladium’s latest moves reflect a mix of macro tailwinds and evolving auto-sector fundamentals. On the macro side, expectations of rate cuts and a softer dollar have lifted the whole precious-metals complex, letting palladium ride the same “gold + liquidity” wave, with renewed investor interest after a long bear market adding fuel.
On the fundamental side, the demand is still anchored in gasoline autocatalysts, which is the single biggest use by far (roughly three-quarters of annual palladium demand), where it helps convert unburnt hydrocarbons into less harmful gases. However, the mix is shifting. Substitution, softer gasoline vehicle output, and rising recycling—especially in China—point to a more balanced market through 2025 even as prices rebound.
On the supply side, Nornickel—the largest producer—has trimmed 2025 output guidance and highlighted operational and sanctions frictions, which support price on the margin. Meanwhile, producer restructuring after low prices underscores tighter, more price-sensitive supply.
Why palladium isn’t gold (or silver)
Back in 2022 prices surged above $3000 on worries about Russian exports; but shipments ultimately kept flowing via Asia, inventories were tapped, and the panic premium faded—one reason palladium now trades closer to $1,500 despite the broader precious rally. On the demand side, carmakers systematically substituted cheaper platinum for palladium in gasoline catalytic converters, alongside rising recycling, with market balances projected to tip to surplus from 2026, capping the upside in price.
Meanwhile, gold made fresh records on rate-cut bets, safe-haven demand and central-bank buying; silver broke out on tight inventories and strong industrial pull, very different investment-led drivers that palladium lacks. All in all, palladium is more industrial and auto linked, with substitution and rising secondary supply acting as headwinds, so even a decent 2025 bounce leaves it well below the 2022 panic peak.
Technical outlook
Palladium has staged a sharp rebound into mid-October having managed to sustain a break above $1,300 for the first time since 2023. Price sits well above the 100- and 200-day SMAs (~$1,150 and ~$1,050) with the 20-day SMA ($1,280) tracking closer but still leaving ample room for a pullback to remain well supported as the RSI ventures deeper into overbought territory. Immediate resistance lies at $1,500–1,520 (psychological + recent highs); a daily close above opens room toward $1,580 next. The intraday ranges have widened suggesting increased volatility, but a buy-the-dip mentality seems to prevail. However, failure to clear $1,520 plus a slip back below $1,450 favours a move toward 1,350.