Investing.com — UBS has cut its price forecasts for both and by $200 per ounce, pointing to deteriorating demand fundamentals and broader economic growth concerns.
The Swiss bank lowered its palladium forecast across all tenors to $1,600 per ounce, down from $1,800. Strategists Giovanni Staunovo and Wayne Gordon note that palladium demand is overwhelmingly concentrated in one application — autocatalysts in gasoline-powered vehicles, which have accounted for 80 to 85% of total consumption over the last six years.
This leaves the market highly exposed to the shift toward electric vehicles. “With the electrification of the car industry underway, a large segment of demand is at risk,” the strategists wrote.
The largest palladium producer has been working to develop new end-markets, filing patents for applications it expects “to generate 1.7 million ounces of demand by 2030-2035,” with fiberglass production in China seen as the primary source of new consumption.
Other potential applications include master alloys for bushings, solar energy, and microelectronics.
But even so, the 1.7 million ounces of projected new demand would still be a fraction of the roughly 8 million ounces consumed annually by the autocatalysts sector.
“Without new demand markets, we believe palladium will move into a structural surplus over the coming years,” the bank said.
On platinum, UBS cut its forecast to $2,300 per ounce from $2,500. The strategists pointed to a series of indicators suggesting physical market tightness — a feature of the platinum market over the past year — has begun to ease.
The three-month lease rate has fallen sharply, dropping to around 6% from nearly 19% at the start of 2026. Furthermore, ETF holdings have declined by almost 300,000 ounces to 2.9 million ounces since January, and futures and options positioning by non-commercial accounts has also weakened.
One positive is platinum imports into China, which rebounded to above 10 metric tons in March after averaging 4.5 to 4.7 metric tons in January and February.
Platinum holdings at Nymex warehouses have also declined, with UBS strategists that some metal has likely moved back to Europe, helping to explain the easing conditions.
Despite the forecast reduction, UBS maintained a moderately constructive outlook on platinum, supported by its expectation of higher gold prices in the months ahead.