---
title: "A big year for silver, platinum, and palladium, who will be stronger next year? Goldman Sachs: More optimistic about the most certain gold"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/267753342.md"
description: "Goldman Sachs released a Q&A on precious metal trading, believing that gold is more certain compared to silver, platinum, and palladium. Although silver, platinum, and palladium are expected to rise significantly in 2025, mainly influenced by the Federal Reserve's interest rate cuts and market expectations, Goldman Sachs remains more optimistic about gold in 2026. The uncertainty of U.S. trade policies has exacerbated the volatility of these metals, and liquidity in the London market is tight. Goldman Sachs expects that the volatility of platinum, silver, and palladium will continue until U.S. trade policies become clearer"
datetime: "2025-11-28T01:25:04.000Z"
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  - [en](https://longbridge.com/en/news/267753342.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/267753342.md)
---

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# A big year for silver, platinum, and palladium, who will be stronger next year? Goldman Sachs: More optimistic about the most certain gold

According to Zhitong Finance APP, recently, Goldman Sachs released a set of Q&A regarding precious metal trading, addressing seven core issues. Goldman Sachs stated that aside from short-term fluctuations, if private investors continue to view silver, platinum, and palladium as higher beta but more volatile alternative assets to gold during the Federal Reserve's easing cycle and diversification theme, then the directional pressure on these metals may trend upwards. ETF fund flows and speculative positions may still be key driving factors. Looking ahead to 2026, Goldman Sachs remains more optimistic about gold compared to silver and platinum, citing higher certainty.

![image.png](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/4c2302385e876eb856cef054ed98c9f0.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

## Question 1: Why have silver, platinum, and palladium surged this year?

From the beginning of 2025 to the present, silver, platinum, and palladium have risen by 66%/65%/50%, respectively. The core driving factors are the influx of private investor funds following the Federal Reserve's interest rate cuts and the market's expectation that these metals should be able to catch up with gold's performance.

In May 2025, the market speculated that Chinese jewelry demand would drive platinum prices to a historic high, prompting Western investors—seeking catch-up trades after gold's rise—to allocate funds to the smaller, less liquid platinum and other precious metal markets. Although Chinese platinum jewelry demand and overall import volumes remain below the average levels of 2021-2024, platinum has still surged 65% year-to-date.

At the same time, uncertainty surrounding U.S. trade policies has exacerbated volatility. Since all three metals are included in the U.S. "Critical Minerals List" (despite being exempted in April 2025, they may still face tariffs of up to 50%), and Russian palladium is under anti-dumping investigation, market participants earlier this year preemptively allocated metal inventories to the U.S.

This shift led to a depletion of liquidity at the benchmark pricing center in London. The tightening of London inventories created conditions for a short squeeze: as investor funds absorbed the remaining metals in the London vaults, price fluctuations became more pronounced; conversely, when the inventory tightness eased, prices would quickly correct.

Goldman Sachs expects that volatility in platinum, silver, and palladium will persist until U.S. trade policies become clearer. Once the metals stranded in the U.S. can flow back, and liquidity in the London market fully normalizes, price fluctuations will moderate.

## Question 2: Is gold also susceptible to a "London short squeeze"?

Gold is less likely to experience a short-term physical squeeze because large institutional holders, including central banks with assets held in custody by the Bank of England, provide a substantial amount of lendable metal reserves. Silver, platinum, and palladium lack this liquidity backing.

When London inventories temporarily tighten, traders typically turn to the leasing market. Investors holding physical metals for portfolio purposes may lend the metals to pharmaceutical companies, manufacturers, or traders for fees (i.e., "leasing rates"), which not only generates income from idle assets but also provides short-term liquidity Due to concerns over trade policies leading to a shift of metals to the United States, and ETF inflows absorbing the remaining metals in London vaults, the immediate supply of metals has tightened, causing leasing rates to soar.

Although gold can alleviate liquidity pressure through the lending capabilities of central banks and institutions, silver, platinum, and palladium lack similar reserves—resulting in insufficient depth in the leasing market. Even temporary liquidity tightness could quickly evolve into sharp price surges.

Nevertheless, gold may still be affected by spillover effects. On October 17, 2025 (Friday), a key factor driving silver prices up—the silver short squeeze—began to unravel, and by October 21, silver prices had dropped by 11%. This pullback could trigger cross-metal liquidation operations, causing gold to fall by 6% on October 21 due to a reduction in speculative positions and outflows from retail ETFs.

## Question 3: What is the likelihood of the U.S. imposing tariffs on these metals?

Goldman Sachs still believes that the likelihood of the U.S. imposing tariffs on silver, platinum, and palladium is low, mainly because the potential for increasing domestic production is limited by geological conditions. Therefore, U.S. tariffs could lead to costs being almost entirely passed on to domestic prices, rather than significantly increasing supply—which would raise costs for downstream industries.

Goldman Sachs' assessment is based on a cost-benefit analysis: the potential benefit is achieving greater self-sufficiency by increasing domestic production. However, in practice, this goal may be difficult to achieve:

**Silver:** If silver is primarily viewed as a financial asset, it is likely to continue receiving exemptions like gold. If viewed as an industrial metal, tariffs may aim to reduce import dependence, but U.S. silver production is very low and mainly a byproduct of other minerals. Higher prices are unlikely to incentivize an increase in mining output. Additionally, the U.S. has proven silver reserves that can only meet current import needs for about five years, limiting self-sufficiency.

**Platinum and Palladium:** Due to their critical role in catalytic converters (and thus in the automotive industry), platinum and palladium frequently appear on global critical mineral lists. However, the supply of platinum and palladium is highly concentrated in two regions—Southern Africa (accounting for 82%/46% respectively) and Russia (accounting for 11%/39% respectively), which poses significant supply disruption risks.

U.S. tariffs may aim to reduce import dependence and mitigate risks of overseas supply disruptions, but domestic alternatives seem limited:

Domestic mineral production in the U.S. is limited, and expansion faces technical and geological challenges. Mining activities are confined to two deposits in Montana, operated by the same company, and the ore has a high palladium content.

A recent government study estimated that the U.S. platinum and palladium mining capacity utilization is about 50% of theoretical capacity. Even if full production is achieved—considering price insensitivity, this outlook is uncertain—the annual net import volumes for platinum and palladium may only slightly decrease to 58 tons and 22 tons (currently 60 tons/30 tons respectively).

Secondary supply relies on automotive scrappage (the main source of catalytic converter waste). The U.S. recycling market is more biased towards palladium (mainly used in the gasoline-dominated U.S. automotive market) rather than platinum (more common in diesel vehicles) Despite the fact that recycling is more sensitive to prices and has a short-term nature, a report from the U.S. government on the risks of supply disruptions of Russian palladium indicates that the main means of mitigating risks is South Africa's excess capacity—rather than domestic recycling, which means that domestic recycling capacity is limited.

In this context, tariffs may raise prices but cannot enhance supply security, and instead may negatively impact the U.S. automotive industry—an industry that U.S. policymakers may wish to protect.

Therefore, Goldman Sachs believes that the likelihood of restricting the inflow of platinum and palladium through tariffs is low. Given the concentration of global supply and the high risk of disruption, a more reasonable policy response may be strategic reserves, along with investments to improve U.S. mining utilization.

## Question 4: Why is inventory on U.S. exchanges still increasing?

The increase in inventory reflects the "spot-to-futures (EFP)" mechanism between London and New York, rather than a directional judgment on tariff trends.

London is the core of the physical market, operating as an over-the-counter (OTC) center; while New York is home to the speculative paper market—silver corresponds to the New York Mercantile Exchange (COMEX), and platinum and palladium correspond to the New York Mercantile Exchange (NYMEX).

These futures contracts are cash-settled and rarely involve physical delivery. The two markets are closely linked through EFP, utilizing arbitrage opportunities between London spot prices and New York futures prices. Normally, this linkage operates smoothly: buying spot in London and selling futures in New York, or vice versa, to maintain price consistency.

When potential U.S. tariffs are taken into account, this dynamic changes. If the U.S. imposes tariffs on silver, platinum, or palladium bars, delivery risks will be introduced. If traders holding London metals short COMEX or NYMEX futures face physical delivery requirements—needing to import metals and pay tariffs—they may incur unexpected costs.

This risk premium widens the EFP spread, causing New York prices to rise relative to London. To reduce risk exposure, traders preemptively allocate metals to the U.S. to ensure delivery capability is not affected by tariff uncertainties.

## Question 5: What is the likelihood of the U.S. banning imports of Russian palladium?

Although the International Trade Commission (ITC) found reasonable evidence that Russian palladium dumping has negatively impacted U.S. producers, Goldman Sachs believes the likelihood of a ban on imports is low.

A report from the U.S. government in August 2025 specifically assessed the risks of supply disruptions of Russian palladium and concluded that the economic losses primarily borne by automakers would far exceed the gains for domestic miners, with an estimated net loss of about $1 billion to the U.S. economy.

The report predicts that under equilibrium conditions (excluding speculative capital flows), palladium prices will rise by 24%, with new supply coming from South Africa rather than the U.S. Therefore, a ban would exacerbate U.S. dependence on a single supplier—South Africa, which faces risks in electricity and labor in its mining sector. The U.S. may impose tariffs on Russian palladium, but even so, Goldman Sachs expects the tax rate to be relatively mild.

## Question 6: What is the outlook for silver, platinum, and palladium?

Before the policy becomes clear, volatility may remain high, mainly because the free flow of the London market is still scarce. Any resolution to the U.S. trade measures should allow metals that were pre-allocated to the U.S. to flow back to London, alleviating inventory tightness and normalizing price trends.

Setting aside short-term fluctuations, if private investors continue to view silver, platinum, and palladium as higher beta but more volatile alternative assets to gold during the Federal Reserve's easing cycle and diversification theme, then the directional pressure on these metals may trend upward. ETF fund flows and speculative positions may still be key driving factors.

Platinum and palladium may face bidirectional industrial demand pressures:

**Upward Pressure:** The speculative rise in platinum and palladium this year has led many industrial consumers (especially automakers) to postpone purchases and rely on leasing, hoping for future price declines. The rise in palladium, in particular, has put greater pressure on U.S. automakers, who are underexposed to palladium and face a persistent undervaluation in the gasoline vehicle market. As industrial consumers begin to accept the reality that prices may remain high—especially if investors continue to view these metals as alternative assets to gold—leasing may eventually shift to spot purchases, further driving up prices.

The increasing popularity of fuel cell applications may benefit platinum. The growth in power demand from AI-driven data centers is putting pressure on the grid. Grid congestion, five-year interconnection delays, and slow construction of high-voltage lines have enhanced the appeal of behind-the-meter (BTM) solutions.

Fuel cells can operate continuously without being affected by grid reliability issues, and platinum is a key catalyst for mainstream technologies such as proton exchange membrane (PEM) batteries. Although platinum group metals (PGMs) can improve efficiency, they also significantly increase costs, prompting the industry to strive to reduce the use of PGMs or develop non-PGM alternatives. Nevertheless, any large-scale expansion of fuel cell deployment will support mid-term demand for platinum.

Although Goldman Sachs has not yet seen evidence of strategic reserves, platinum, palladium, and rhodium, among other platinum group metals, may rank high on any strategic reserve list. The production of these metals is concentrated in two regions: Russia and Southern Africa, and they are crucial for catalytic converters, a core component of automotive manufacturing.

**Downward Pressure:** The rapid adoption of electric vehicles in China is eroding the demand for platinum group metals in automotive catalytic converters, while the scrapping of gasoline vehicles is increasing recycling supply.

## Question 7: Is gold still the most confident choice?

Among all precious metals, Goldman Sachs remains most confident in a bullish outlook for gold—not because its percentage return is necessarily higher than that of other precious metals, but because gold has the most enduring structural support.

Given the lower liquidity and amplified price volatility of other precious metals, they may achieve larger increases if specific catalysts emerge, but gold's uniqueness lies in two key aspects:

**Central Bank Purchases:** This trend is already underway and may become a theme that lasts for several years.

**ETF Demand:** Driven by the Federal Reserve's interest rate cuts and potential diversification fund flows. Gold, as a value storage tool with over 5,000 years of history, supports deeper institutional demand and more stable fund inflows In contrast, Goldman Sachs has a higher level of uncertainty regarding the outlook for silver, platinum, and palladium:

**Volatility Risk:** The scarcity of liquidity in the London market means that once policies become clear, there could be a significant correction.

**Investor Positions:** Demand is largely speculative—these metals are high-beta derivatives of gold trading. In a recessionary environment, investors tend to prefer gold to avoid exposure to pro-cyclical industrial demand, thus positions in these metals typically decrease.

**Industrial Demand:** While the prospects for platinum in fuel cells are promising, they are still in their infancy. High costs and ongoing technological innovations mean caution is warranted—industrial commodities face substitution risks. For example, high silver prices have led to silver being replaced by cheaper copper in solar cells, which limited the upside for silver during the solar boom in China in 2022.

**Strategic Reserves:** Goldman Sachs has not found evidence of sovereign nations engaging in strategic reserves, so any upside potential from this factor remains speculative

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