UBS has raised its palladium price forecast by $300 per ounce to $1,800, citing a sharp pickup in investment flows. Analyst Giovanni Staunovo attributed the upgrade to solid investment demand in recent months, noting the metal's small market size often leads to large price swings.

The bank attributes recent price momentum to investors positioning for lower U.S. interest rates, a weaker dollar, and geopolitical uncertainty, rather than traditional industrial uses. While palladium demand from autocatalysts peaked in 2019, the metal has rallied alongside platinum since mid-2025 and is now cheaper, which could spur a switch back by producers.

Investment activity is building, with rising ETF holdings since mid-2025 and a jump in speculative futures positioning. UBS also points to potential support from China, where new yuan-denominated platinum futures in Guangzhou may have boosted palladium demand as part of broader trading in platinum-group metals.