Palladium’s price has jumped 44% since the beginning of the year, but it still lags behind other main precious metals. Weak demand has affected Palladium, especially because car sales have decreased. A large portion of Palladium’s demand comes from the automotive sector, more so than Platinum’s. In May, the WPIC predicted a supply surplus for Palladium next year, but that view has changed. Demand expectations have improved, pushing the expected supply surplus to 2028. Signs of a relaxing Palladium market suggest that prices may not recover much. Commerzbank has revised its Palladium price forecast to $1,350 per troy ounce by the end of 2026, up from the previous estimate of $1,300. However, no further price increases are expected next year. This analysis was put together by FXStreet’s Insights Team, which gathers expert market observations and adds their own insights. With Palladium currently trading around $1,220 an ounce, the forecast of $1,350 by the end of 2026 indicates a gradual but limited price increase. In this situation, strategies that benefit from a slow rise seem more advantageous than trying to catch a sharp price jump. In the coming weeks, we might consider taking some moderately bullish positions. The main driver is still the automotive industry, where demand has been weak. However, global auto sales data for the third quarter of 2025 showed a surprising 2% growth in hybrid vehicle production, which still uses Palladium. This recent information supports the idea that demand is strengthening, pushing back the expected supply surplus. Given this positive outlook, buying long-term call options with strike prices around $1,300, expiring in mid-2026, could be a smart choice. We should keep in mind the extreme price swings we’ve seen in the past, like the drop from over $3,000 in 2022 to less than $1,000 in late 2023. This makes defined-risk strategies, like bull call spreads, especially appealing. This approach lets us benefit from the expected price increase while limiting potential losses. On the supply side, the market looks tighter than it did a few months ago. Reports from major South African mining companies in September 2025 revealed ongoing operational challenges. This supports the view that a significant supply surplus is unlikely before 2028, creating a solid price floor in the near term.

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