Why Palladium Has Trailed
- EV fears crushed sentiment: Investors assumed EVs would kill autocatalyst demand overnight
- Russian supply overhang: Despite sanctions, Russian output held up short-term
- Substitution to platinum: Auto manufacturers shifted some loadings to cheaper platinum
The gold/palladium ratio is stretched to historic extremes — cheaper relative to gold than at almost any point in two decades. That's sentiment, not fundamentals.
Supply Crunch: Tightest Fundamentals
Russia (40%+ of supply) faces escalating sanctions and logistical issues. South Africa (40%) battles power outages, strikes, and depletion.
No meaningful new mines coming online — lead times are 10+ years. Above-ground stocks are depleted. Market has been in structural deficit since 2018.
Palladium's supply elasticity is zero. Any demand surprise triggers violent price spikes.
Demand: Far From Dead
The "EV apocalypse" narrative was overblown. Hybrids (which use MORE palladium than pure ICE) are booming as a bridge technology. Gasoline vehicles still dominate new sales globally.
Emerging catalysts: hydrogen fuel cells, advanced emissions standards, industrial uses. Plus monetary demand spillover as gold and silver rally.
The Catch-Up Potential
History shows palladium moves in violent bursts. From 2016–2021, it delivered a 10x rally.
We see $2,000 as the first realistic target. $3,000+ is entirely plausible in a continued inflationary regime. Miners offer triple-digit torque.
This laggard has way higher to go — potentially leading the metals charge in 2026. Don't sleep on it.
Vector Ridge is aggressively adding to palladium exposure on weakness — now our highest-conviction sub-theme within the beyond-maximum overweight precious/industrial metals basket (gold, silver, platinum, palladium, uranium). This article represents our views at the time of publication and should not be considered investment advice.
Three sentiment-driven forces dragged it down: EV fears that investors assumed would kill autocatalyst demand overnight, a short-term Russian supply overhang that held up despite sanctions, and auto manufacturers substituting some loadings to cheaper platinum. The article argues this is sentiment rather than fundamentals, with the gold/palladium ratio stretched cheaper relative to gold than at almost any point in two decades.
Roughly 80% of supply is concentrated in just two troubled sources: Russia (40%+) facing escalating sanctions and logistical issues, and South Africa (40%) battling power outages, strikes, and depletion. No meaningful new mines are coming online given 10+ year lead times, above-ground stocks are depleted, and the market has been in structural deficit since 2018 — supply elasticity is effectively zero.
The article treats the "EV apocalypse" narrative as overblown. Hybrids, which use more palladium than pure internal-combustion vehicles, are booming as a bridge technology, gasoline vehicles still dominate global new sales, and emerging catalysts like hydrogen fuel cells, tighter emissions standards, and industrial uses add further demand.
Views like this palladium thesis come from the Vector Ridge Macro Framework, and trade ideas are delivered through four models — Day Trade, Multi-Hour, Swing Trade, and Investing — each tagged with conviction grades from A (highest) to D (lowest). Access is $20/month for a single model or $50/month for all models, with a 7-day free trial; Vector Ridge was founded by Darren O'Neill (Oxford Saïd MAFE, verified 2025 WCTC returns of 294% and 168%).