Key Takeaways
- UBS raised its palladium price targets by $50 per ounce across all time horizons, projecting ongoing slight undersupply through 2026.
- Sentiment in palladium’s options market remains moderately positive, though less buoyant than early 2025 amid eased Russian sanctions concerns.
- U.S. Section 232 Critical Minerals investigation and a related antidumping petition pose key risks for future palladium price volatility.
UBS updated its palladium price outlook on November 25, 2025, boosting targets by $50 per ounce for short, medium, and long-term periods. The Swiss bank’s revision reflects expectations that the metal’s market will remain slightly undersupplied through 2026, owing mainly to persistent global production constraints. While options market sentiment stays positive, it has softened compared to earlier spikes related to geopolitical risks from Russian palladium exports. Market participants now closely monitor U.S. trade policy developments that could reshape palladium’s price dynamics.
UBS Raises Palladium Price Forecast Amid Supply Tightness
UBS’s latest analysis signals confidence in a continued palladium supply deficit in coming years. The bank cites ongoing challenges, especially since Russia supplies about 40% of global palladium mine output. Earlier in 2025, speculation about new sanctions on Russian palladium pushed options market optimism to highs, but the steady flow of Russian metal has lessened disruption fears since then.
The palladium options market still reflects cautious positivity. UBS highlights the implicit volatility differential—which compares call and put options over one- to six-month horizons—now sits between 1.8% and 2.4%. This contrasts sharply with the January 2025 peak of 3.4% to 9.1%, a period marked by heightened geopolitical tension affecting supply prospects.
Policy Developments to Drive Palladium Price Volatility
Going forward, key uncertainties hinge on U.S. trade investigations. The Section 232 inquiry into critical minerals and an antidumping petition filed by Sibanye Mining and the United Steelworkers Union could lead to palladium import tariffs. A ruling imposing tariffs would disrupt global supply chains and increase price volatility.
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UBS stresses that although the palladium price targets have been raised, other precious metals may offer greater upside potential. Still, the forecasted undersupply through 2026 suggests sustained pressure on palladium prices. Investors will be watching the U.S. administration’s decisions closely, as these will critically influence palladium’s market balance.
Palladium: Market Outlook
UBS’s $50 per ounce price target increase underlines a cautiously optimistic palladium market outlook amid ongoing supply challenges. While option market sentiment has cooled since the early 2025 surge linked to sanctions risks on Russian exports, the metal’s fundamental tightness remains intact. Ultimately, U.S. policy choices around import tariffs under the Section 232 investigation stand as the decisive factors for palladium’s price trajectory and volatility. These developments will be pivotal for palladium’s role in the commodities sector through 2026.
