Saturday, January 10: The decision on Section 232 tariffs will bring volatility to precious metals, especially platinum prices today.

This weekend marks a critical moment for precious metals markets. The White House will announce its decision regarding the Section 232 tariffs investigation for strategic minerals, which will generate entirely different dynamics depending on the outcome. Citi’s analytical team estimates that the implied tariff rates reflect considerable uncertainty: approximately 12.5% for platinum, 7% for palladium, and 5.5% for silver, based on EFP prices as of January 7.

Impact scenarios depending on the imposition or exclusion of tariffs

If no tariffs are implemented, metal flows from U.S. territory to other regions will accelerate, alleviating the extreme tension currently characterizing the markets. This outflow would bring relief to London and pressure spot prices globally.

Alternatively, if tariffs are activated, there is a window of approximately 15 days before they come into effect that would trigger massive speculative “preemptive buying” behavior in the U.S. This phenomenon would push platinum prices today and other metals toward temporary highs, while EFP premiums expand before implementation. After tariffs are imposed, imports would decline, easing pressure on the non-U.S. physical market.

Silver: base scenario without tariffs, but with correction risks

Since the U.S. heavily depends on silver imports, Citi’s analysis leans toward this metal escaping tariffs or receiving exemptions for key suppliers like Canada and Mexico. In such a case, prices would face temporary corrective pressures, as the absence of barriers would allow inventory drainage from the U.S. to markets with greater physical scarcity.

Historical high lease rates highlight the severity of the physical supply deficit outside the U.S. Outflows of metals abroad would rebalance this situation. Note that the annual rebalancing of the Bloomberg Commodity Index (BCOM) coincides with the decision window: from January 8 to 14. Citi anticipates an outflow of approximately $7 billion in silver, equivalent to 12% of open positions on Comex. This redistribution, combined with price weakening due to U.S. exports, could temporarily slow institutional investment in ETFs.

Palladium: highest probability of high tariffs and market fragmentation

Among the three metals, palladium faces the highest risk of substantial tariff imposition. Two factors explain this: first, the U.S. has potential to expand domestic supply through increased refining of nickel or platinum, where palladium emerges as a byproduct; second, national industrial lobbies—especially catalytic converter manufacturers and mining companies—exert significant political influence in favor of protectionist measures.

If high tariffs are imposed on palladium (estimated around 50%), prices would experience immediate spikes, and a lasting “dual market” would be established. The U.S. would become a high-price market, with premiums reflecting roughly the tariff rate plus logistical costs. Global trade flows would be redirected toward regions without tariffs, while the U.S. market would mainly rely on domestic production and tariff-exempt imports.

Platinum: persistent uncertainty

Regarding platinum, Citi expresses considerable uncertainty about its tariff status, comparing it to “flipping a coin.” The U.S. depends more heavily on platinum imports and has little room to increase domestic supply, factors that reduce the likelihood of tariffs. However, the metal could still be tariffed along with palladium.

Inventories of platinum and palladium on the New York Mercantile Exchange remain near all-time highs, although recent inflows into platinum-group metal ETFs have worsened physical scarcity. Fund positions according to CFTC turned positive for the first time since 2022, increasing volatility.

This Saturday’s decision will redefine the price structure for the coming years, particularly for platinum prices today and the dynamics of the entire precious metals complex.