2024 was a resurgence for gold investors…
The metal broke and held above $2,000 an ounce for the first time. And its 27% rally beat U.S. stocks, which also had a fantastic year (rising 23%).
The reasons for the boom aren’t complicated… Gold is the simplest precious metal. It’s valuable because people want to own it.
It doesn’t have many practical uses, making it close to a pure investment market.
That’s the opposite of basically every other commodity in the world… including the group of precious metals that I’m sharing today.
This group of metals gets less attention than gold. But as you’ll see, it’s poised for big returns in 2025 – thanks to a major trend.
Let me explain…
I expect good things from gold this year. But the bigger opportunity for investors is in platinum group metals (“PGMs”).
These include platinum, palladium, rhodium, and a few other, less important metals.
PGMs are special because they’re rare, dense, stable, and resistant to chemicals and corrosion. But most important, they work as catalysts in a chemical reaction.
Crucially, catalysts can start reactions without breaking down along the way… So you can use them over and over again.
Because of that, the industrial demand for PGMs is massive. For example, you’ll find them in most cars on the road. We use them in catalytic converters, which turn unsafe exhaust into safer gases before they exit the vehicle.
So, PGMs are precious metals, just like gold… But unlike gold, their prices rise and fall based on supply-and-demand imbalances. They’re far from pure investments.
That explains why they’re such a great opportunity today. These metals have taken a beating over the past few years… thanks to the rise of electric vehicles (“EVs”).
EV sales accounted for less than 1% of new-car sales in the U.S. in 2016. But by 2023, that had grown to an impressive 8% share of that market. And that swift growth has put EVs on a path to overtake internal-combustion vehicles.
That seemed like a bad sign for PGMs. These metals – specifically palladium – get huge demand from traditional gas-powered cars. In 2022, the car market made up more than 80% of palladium demand.
So it’s no wonder PGM prices have crashed in recent years. Take a look…
Platinum is down nearly 30% since peaking in 2021. Palladium is down more than 60% over the same period… And at its worst, the metal dropped more than 70% from its 2022 high.
This bloodbath happened on the back of the EV boom. But now, things have changed – because it appears the EV boom got ahead of itself…
In the first half of 2024, EVs lost market share in the U.S. for the first time. That might turn out to be a blip on the radar – but it’s the first letdown in a growth market that seemed to have nowhere to go but up.
Now, I fully expect EV sales to keep growing from here. But that will probably happen at a slower pace… which means long-term PGM demand will be much higher than many thought just last year.
This is already turning the palladium market upside down…
Johnson Matthey – a major company that makes auto catalysts – expects a platinum shortfall of nearly 600,000 ounces in 2024. That’s a 15% increase from 2023. And it’s the largest supply deficit in a decade.
In short, the EV craze led folks to think we wouldn’t need as many PGMs in the future. But the slowdown has led to a setup where we need more of these metals than we’re pulling out of the ground each year.
When demand outruns supply, the investment outcome is clear… dramatically higher prices.
This is the fundamental driver for platinum and palladium in the coming years. And there’s more to the story, too.
Each of these metals has a specific reason why its price could soar in the months ahead. I’ll share those details with you tomorrow.
Good investing,
Brett Eversole
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Source: Daily Wealth