{{articledata.title}}

Swiss bank UBS (NYSE: $UBS ) has raised its 2026 price forecasts for platinum and palladium following a big rally in both metals.

Platinum prices have surged to a 17-year high, rising by nearly $500 U.S. per ounce over the last month.

The increase has been driven, in large part, by the European Union's plan to ease its 2035 ban on combustion engine vehicles.

The move, combined with slow electric vehicle adoption, has fueled speculation that platinum demand in automobiles could remain higher for longer, according to an analysis by UBS.

As a result, the bank has revised up its platinum forecast by $300 U.S. per ounce, citing "higher investment demand and a tighter market."

UBS also remains bullish on palladium, saying the auto industry will likely switch to the metal as platinum becomes more expensive over the next year.

Palladium currently trades at a discount to platinum of about $250 U.S. per ounce, notes UBS.

However, palladium has also enjoyed a strong rally in recent weeks, reaching levels last seen almost three years ago.

UBS says that the palladium market is tighter than previously expected due to investment demand and supply-side issues.

The palladium market is likely to be undersupplied in 2026, says UBS. As a result, the bank has raised its palladium forecast for next year by $100 U.S. per ounce.

Overall, UBS expects the metals market to remain volatile in the coming 12 months as geopolitics and tariffs continue to impact the sector.

Should U.S. tariffs be rolled back, it could allow palladium and platinum bars that moved into the U.S. to be exported back to Europe, improving supply in London and Zurich, says the bank's commodities analysts.

UBS' stock has risen 52% this year to trade at $46.10 U.S. per share in New York.