Silver, platinum and palladium have posted year-to-date gains of 66%, 65% and 50%, a surge driven primarily by investor flows, thin London inventories and uncertainty surrounding U.S. trade policy, according to a recent note by Goldman Sachs. 

The rally has unfolded despite limited evidence of strong industrial demand, underscoring the financial and structural forces behind the moves.

The analysts say private investors increased allocations after the Federal Reserve cut rates, treating the metals as higher-beta alternatives to gold.

The belief that the three metals needed to “catch up” after gold’s earlier rally also pushed money into the relatively small and less liquid platinum and palladium markets. 

Platinum, for instance, climbed 65% YTD even though Chinese platinum jewelry demand and overall imports remained below their 2021-24 average.

A second major driver was the shift of physical metal into the United States. All three metals are on the U.S. 

Critical Minerals List, making them theoretically eligible for tariffs of up to 50%, even though they were exempted in April 2025. 

At the same time, Russian palladium was placed under an anti-dumping investigation. Concern about potential trade actions prompted traders to move metal into U.S. exchanges to avoid delivery risk, which thinned inventories in London, the global pricing hub.

When London’s float shrank, price squeezes became easier to trigger and harder to control.

The brokerage notes that tightness made silver’s October squeeze particularly sharp. When the squeeze unwound, silver prices fell 11% between Oct. 17 and Oct. 21, sparking cross-metal unwinds that pushed gold 6% lower on Oct. 21. 

The analysts emphasize that silver, platinum and palladium lack the deep institutional lending base that supports gold liquidity, making them more vulnerable to volatility when London stocks tighten.

Goldman Sachs views the likelihood of broad U.S. tariffs on these metals as low. U.S. production is geologically constrained: silver output is minimal and largely a byproduct, and known domestic reserves would cover only about five years of current import needs.

Platinum and palladium mining is concentrated in Southern Africa and Russia, with U.S. production limited to two deposits in Montana, operating at only about 50% of theoretical capacity. 

A ban on Russian palladium is also considered unlikely, as a U.S. government study projected a 24% price increase and roughly $1 billion in net economic losses, primarily for automakers.

Industrial demand remains mixed. China’s rapid EV adoption is reducing PGM autocatalyst demand while increasing scrap supply. Platinum’s potential role in fuel cells, driven by data-center power needs, remains early and uncertain. 

The analysts add that earlier precedents, such as copper substituting for silver in solar cells during China’s 2022 solar expansion, illustrate the risk of substitution at high price levels.