After Gold, What's Next? Citi's 2026 Outlook Favors Platinum Group Metals Driven by Industrial Substitution and Valuation Rebound

Deep News12-05

In 2026, Citi's research team maintains a cautiously optimistic stance on global precious metal equities, explicitly favoring Platinum Group Metals (PGMs) over gold.

According to trading desk observations, Citi's latest research report indicates PGMs demonstrate superior risk-reward characteristics compared to gold for 2026. The investment bank notes gold prices have stabilized around $4,000/oz with balanced risk-reward dynamics, while platinum and palladium exhibit upward potential.

Citi highlights that PGMs have significantly underperformed gold over the past three years, with platinum trading at unusual historical discounts. Analysts suggest industrial demand substitution from gold to platinum could provide additional price support for platinum and palladium.

The report estimates current gold equity prices reflect approximately $3,200/oz gold price expectations - a 25%+ discount to spot prices. Meanwhile, PGM equities price in a $1,220/oz basket price, representing over 20% discount to spot.

Valuation Advantages for PGMs Citi's research shows PGMs have substantially lagged gold's performance, with platinum trading at rare historical discounts. Industrial demand substitution from gold to platinum may provide additional price support.

PGM equities currently price in a $1,220/oz basket price, offering over 20% discount to spot with compelling valuation appeal. Historical data indicates precious metal equities closely track underlying commodity performance, with gold stocks showing over 82% R² correlation with gold prices over five years.

Analysts note if spot prices maintain current levels, equity re-rating could drive upside potential, presenting entry opportunities at current discounted valuations.

Divergent Investor Sentiment Amplifies PGM Rebound Potential Citi's crowding metrics reveal polarized investor positioning across precious metal subsectors. Gold equities like AngloGold and Fresnillo are classified as "consensus long," while PGM players Sibanye and Impala are marginally categorized as "consensus short."

This sentiment divergence creates additional upside potential for PGMs, particularly against improving fundamentals. Citi believes PGM equities could attract renewed investor interest as prices recover and sector valuations get reassessed.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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