NEW YORK, January 6, 2026 — Platinum futures are poised for their strongest monthly rally in nearly four decades, surging in December as the European Union reversed its 2035 combustion-engine ban and supply tightened, signaling a potentially bullish year for precious metals despite recent declines in gold and silver.
Precious Metals Mixed: Platinum Soars While Gold Faces Headwinds
A surprising shift in EU policy and industrial demand are driving a divergence in the precious metals market.
- Platinum is leading the charge, up 33% in December alone, its largest jump since 1986.
- The EU’s U-turn on the combustion-engine ban is a major catalyst, extending the need for platinum group metals (PGMs) in catalytic converters.
- While gold and silver have faced selling pressure, they remain near significant support levels.
- Palladium is also benefiting from the shift, alongside rising gold and silver prices.
The unexpected move by the European Union in December 2025 to delay its 2035 ban on combustion engines has injected new life into the platinum group metals (PGMs) market, acting as a “steroid jab” for demand. This isn’t an indefinite extension, but the EU will continue to enforce increasingly stringent emission standards, requiring higher PGM loadings in catalytic converters.
Gold, which emerged as a standout asset in 2025, benefited from the Federal Reserve’s monetary easing. The U.S. central bank cut interest rates three times last year, lowering the opportunity cost of holding non-yielding assets and boosting gold’s appeal. Markets are also pricing in further rate reductions in 2026, reinforcing bullish sentiment. Central bank purchases, particularly from emerging market nations diversifying away from the U.S. dollar, also provided support. Geopolitical tensions in Eastern Europe and the Middle East further underpinned gold’s safe-haven demand.
However, U.S. gold futures declined 1.9% to $5.67 a pound, signaling potential downside. Technical formations in weekly and monthly charts suggest further sliding is likely in gold and silver in the coming weeks, potentially extending selling pressure to platinum and palladium. Despite this, both platinum and palladium have limited downside from current levels, remaining near significant support levels.
Silver also posted dramatic gains in 2025, surging nearly 150% due to its role as a monetary metal and a sharp rise in industrial demand. Strong consumption from the solar energy sector, electric vehicles, electronics, and data centers tightened supplies, while speculative buying amplified price gains.
Platinum recorded a stellar year, rising more than 110% as supply constraints and improving demand drove prices higher. Limited mine output and years of underinvestment left the platinum market vulnerable to sharp price moves when demand improved. Platinum, also used in jewelry, is up 33% so far in December, its biggest jump since 1986, according to LSEG data. After hitting a record high of $2,478.50 per ounce on Monday, the metal is heading for its biggest yearly growth on record of 146%.
Palladium and rhodium, both used in auto catalysts to reduce car exhaust emissions, have also surged this year, offsetting long-term headwinds from the rise of electric vehicles. Both platinum and palladium benefited from defensive stock-building and tighter supply in regional physical markets due to outflows to the U.S., as Washington included the metals on the U.S. critical minerals list. The market anticipates more clarity on U.S. tariffs in January 2026.
The launch of PGMs futures trading in China a month ago provided another boost, attracting speculative flows and prompting the Guangzhou Futures Exchange to adjust price limits. These contracts represent the first domestic price-hedging mechanism for PGMs in the world’s second-largest economy, which is also the top PGM consumer, heavily reliant on imports. If Chinese spot import buying remains elevated, the major test for platinum group metals will likely come after clarity on U.S. tariffs.
Despite easing slightly from recent highs, precious metals broadly outperformed most asset classes in 2025, bolstered by exchange-traded fund inflows and strong retail investment, particularly during periods of heightened market stress.
Disclaimer: Readers are advised to take any position in platinum and palladium at their own risk, as this analysis is based only on observations.
