What is the Platinum-Palladium Ratio?
At a Glance:
-
- The platinum-palladium ratio describes the price disparity between platinum and palladium.
- A ratio of more than 1:1 means that platinum is more expensive than palladium.
- The platinum-palladium ratio can help investors figure out which metal may be undervalued.
- On this page, learn more about the platinum-palladium ratio – and what drives it.
What is the Platinum-Palladium Ratio?
Platinum and palladium are both part of the platinum group of metals. Platinum group metals possess similar qualities, including their brilliant white colors and resistance to corrosion. Like platinum, palladium is used to produce catalytic converters for vehicles. The automotive sector accounts for around 40% of annual demand for platinum, and a whopping 80-90% of global demand for palladium comes from the automotive industry.
Under regular circumstances, the prices of platinum and palladium maintain something called parity. Price parity refers to a market in which two assets, in this case platinum and palladium, are relatively equal in value. Historically, a platinum or palladium price jump causes industry leaders to switch from the more expensive metal to the less expensive one, causing prices to reconverge.
The platinum-palladium ratio measures the number of ounces of palladium required to equal the value of one ounce of platinum. Like the gold-silver ratio, investors can use the platinum-palladium ratio to assess which of the two metals may be undervalued in a given moment.
On this page, learn more about the platinum-palladium ratio, how to read it, historical figures for the ratio, and more.
Understanding the Platinum-Palladium Ratio
Many investors already know about the gold-silver ratio, which measures the number of ounces of silver required to equal the value of a single ounce of gold. The gold-silver ratio can vary considerably from day to day, since the price of silver is consistently so low compared to the spot price of gold.
The platinum-palladium ratio works similarly. The platinum-palladium ratio describes the number of troy ounces of palladium required to equal the same value as one troy ounce of platinum. Unlike the gold-silver ratio, the platinum-palladium ratio rarely moves by more than a couple of points in either direction.
This is because platinum and palladium usually exist in a relative state of parity, which means that their values are generally close to one another. Since both platinum and palladium are primarily used in the automotive sector to produce catalytic converters, the industry is typically highly efficient at keeping prices stable across the two platinum group metals.
That being said, this decade has seen several large movements in the platinum-palladium ratio. The ratio hit a decades-long low in 2020 after palladium prices increased, and the ratio jumped in 2025 as platinum prices climbed and palladium prices fell lower.
It is important for investors to understand what the platinum-palladium ratio is – and how it is determined.
What Drives the Platinum-Palladium Ratio?
The platinum-palladium ratio is relatively easy to calculate. Simply divide the current spot price of platinum by the current spot price of palladium. A ratio higher than one means that platinum is more valuable than palladium, while a ratio below one shows that palladium is more valuable than platinum.
But what drives the platinum-palladium ratio? Because the platinum-palladium ratio measures the relationship between two assets, a range of different factors can drive the ratio higher or lower. Spikes in demand for either metal, the discovery of new platinum or palladium mines, or disruptions in supply chains can drive the platinum-palladium ratio either higher or lower.
Geopolitical tensions and industrial supply chain issues can also drive the platinum-palladium ratio. Throughout the history of platinum group metals, prices have jumped and retreated along industrial lines, especially within the automotive sector.
Historical Platinum-Palladium Ratios
The platinum-palladium ratio does not tend to vary considerably from year to year, unlike the gold-silver ratio. Since gold is so much rarer and more valuable than silver, the gold-silver ratio can move several points in a matter of days as one metal gains compared to the other.
For platinum and palladium, longstanding parity between the two metals means that the platinum-palladium ratio rarely moves by more than a point – even over the course of a year or more. In smaller timespans, the platinum-palladium ratio can experience more significant jumps. Because platinum and palladium are both useful in the automotive sector, the market tends to self-correct over time, returning the metals to a state of price parity.
The platinum-palladium ratio peaked at around 1.6 in 2016 and experienced a low of less than 0.5 in 2020. If we look a bit closer, the platinum-palladium ratio tells us something about the performance of each individual metal. Platinum prices spiked in 2016, while palladium prices remained stagnant. Likewise, the spot price of palladium jumped considerably in 2020, while platinum prices moved little.
In nearly 10 years, the platinum-palladium ratios high and low were separated by around one point – that’s it!
Let’s compare the platinum-palladium ratio to what we know about the gold-silver ratio. The ten-year high gold-silver ratio was 119.64, which was the GSR in March of 2020. In February of 2021, the gold-silver ratio hit 64.68:1, a 10-year low. That’s a difference of almost 55 points.
Highest and Lowest Historical Platinum-Palladium Ratios
The highest platinum-palladium ratio was over 5.0:1, which occurred during the Great Recession in 2009. During the Great Recession, platinum prices recovered after the 2008 crash, while the spot price of palladium remained lower than $300 per troy ounce.
The lowest recorded platinum-palladium ratio is 0.6:1, which has been the platinum-palladium ratio at multiple points throughout the market’s history. Technically, palladium is rarer than platinum. But because platinum has a more diverse set of use-cases, it often trades at a higher rate than palladium, which is almost exclusively used for investment and in the production of catalytic converters.
The Platinum-Palladium Ratio in 2025
In 2025, the platinum-palladium ratio has remained above 1:1, signaling that platinum was more expensive than palladium for almost the entire year. Palladium prices lagged behind platinum for most of 2025, and this trend shows few signs of stopping.
Watching the platinum-palladium ratio can help investors make better choices about which products they should buy. While the platinum-palladium ratio doesn’t move as radically as the gold-silver ratio, it still provides investors with key insights about which precious metal may be overvalued or undervalued compared to the other.
Platinum vs. Palladium: What’s the Better Investment?
Platinum and palladium both offer benefits – and drawbacks – to investors. Platinum has long been one of the world’s most useful metals, and it is used in a range of different industries. Palladium is also highly useful, but most of the world’s demand for palladium comes from the automotive sector.
There are more platinum products than palladium ones available on the market. Many of the world’s leading mints produce platinum coins and bars, but a smaller number manufacture palladium coins and bars. This means that investors have more options when they invest in platinum than palladium.
Palladium is rarer than platinum, however, and it’s becoming an increasingly popular investment vehicle. While palladium is not as popular as platinum among mints, the precious metal is gaining traction among both investors and manufacturers. To some traders, palladium represents an undervalued alternative to platinum.
At the end of the day, the best precious metal to buy depends on your personal preferences, investing goals, and budget. While the platinum-palladium ratio can be a good tool for identifying which platinum group metal may be undervalued compared to the other, the choice is ultimately yours.
As always, we tend to recommend diversifying your portfolio with a combination of different precious metals, including both platinum and palladium.
Final Thoughts: What is the Platinum-Palladium Ratio?
The platinum-palladium ratio measures the price disparity between platinum and palladium, two precious metals known for their whitish color, corrosion resistance, and usefulness in the production of catalytic converters. A platinum-palladium ratio above one suggests that platinum is more valuable than palladium, while a ratio below one suggests the opposite relationship.
The platinum-palladium ratio has remained low for most of 2025, as platinum has been more expensive than palladium for the majority of the year. Throughout the market’s history, the platinum-palladium ratio has ranged from as low as 0.6:1 to as high as more than 5.0:1. The ratio experiences less volatility than the gold-silver ratio, although large fluctuations can occur due to supply chain breakdowns, new mine discoveries/closures, or spikes in demand.
You might also be interested in:
About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.