Bank of America Securities just moved the goalposts on platinum group metals, and frankly, they had to. Spot prices already blew past their old targets.

On Friday, January 9, the bank's analysts lifted their 2026 platinum forecast to $2,450 an ounce from $1,825, and bumped palladium to $1,725 from $1,525. Why the sudden revision? Spot prices had already surged beyond $2,440 for platinum and $1,825 for palladium. When reality overtakes your forecast that quickly, you update the spreadsheet.

The bank expects platinum to keep outperforming palladium, driven by persistent market deficits. Any supply response will be sluggish, they note, because of "production discipline and inelastic mine supply." Translation: miners can't just flip a switch and produce more metal when prices spike.

Tariffs Enter the Chat

What's driving this rally? Trade disruptions, for one. U.S. trade investigations have squeezed physical availability and distorted flows, especially for palladium. The bank flagged the unresolved risk that duties could pile up inventories on U.S. exchanges and spike exchange-for-physical premiums.

Palladium has been particularly jumpy as markets price in the threat of punitive tariffs on Russian material. Here's where it gets wild: The U.S. Department of Commerce estimated a dumping margin of roughly 828% on unwrought Russian palladium. That means Russian palladium is supposedly being sold in the U.S. at a price nearly nine times lower than what's considered "fair." If that figure gets translated into actual duties, domestic prices could go absolutely vertical, given Russia's massive share of global supply.

Supply constraints have amplified the move. Norilsk Nickel, Russia's key producer, reported lower output due to equipment transition and changes in ore composition. In the first nine months of 2025, platinum and palladium production dropped 7% and 6%, respectively. That near-term shortfall has tightened the global market, though Bank of America expects Russian output to eventually recover.

China's Playing a Role Too

Meanwhile, China has become another major factor. A rebound in jewellery demand, combined with record gold prices, has encouraged substitution into platinum. Bank of America estimates that just a 1% shift in gold jewellery demand could widen the platinum deficit by nearly one million ounces—about 10% of global supply.

Add to that the launch of physically backed platinum and palladium futures on the Guangzhou Futures Exchange, which has pulled additional metal into China. Palladium imports have quadrupled since September alone.

But Wait—There's a Warning

Not everyone is buying the rally. Precious metals service provider Heraeus warned that platinum prices look stretched after ending December more than 44% above their 200-day moving average.

"That threat still hangs over palladium and platinum with the U.S. government's Section 232 and Russian anti-dumping investigations yet to report," Heraeus said, according to Mining Weekly.

Heraeus pointed to mean reversion: historically, on seven occasions when platinum traded more than 20% above its 200-day average, prices later corrected by 10% to 20%. If history rhymes, platinum buyers who jumped in late might be in for a rough ride.

So we've got Bank of America raising targets while Heraeus flashes a caution sign. Welcome to commodity markets, where everyone's looking at the same chart and seeing completely different things.