Who will take over after gold? Citigroup's 2026 outlook is optimistic about platinum group metals, driven by industrial substitution and valuation recovery

In 2026, Citigroup's research team holds a positive attitude towards global precious metal stocks, clearly favoring platinum group metals (PGMs) over gold.

According to the Wind Trading Desk, Citibank stated in its latest research report that platinum group metals have better risk-return characteristics compared to gold in 2026. The investment bank believes that gold prices have stabilized around $4,000 per ounce, with relatively balanced risk and return, while platinum and palladium have upward potential.

Citigroup pointed out that platinum group metals have significantly lagged behind gold prices in the past three years, with platinum trading at a substantial discount to gold, which is historically uncommon. The bank's analysts believe that the marginal substitution of gold for platinum in industrial demand may further support platinum and palladium prices.

The report predicts that current gold stock prices reflect an expected gold price of about $3,200 per ounce, with a discount of over 25% compared to spot prices, while platinum group metal stock prices reflect a basket price of about $1,220 per ounce, with a discount of over 20% compared to spot prices.

Clear Valuation Advantage for Platinum Group Metals

According to Citigroup's research, platinum group metals have significantly underperformed gold in the past three years, with platinum currently exhibiting a rare historical discount to gold. The report suggests that as industrial demand marginally substitutes gold for platinum, platinum and palladium prices are expected to receive additional support.

At the same time, platinum group metal stocks are currently priced based on a basket price of $1,220 per ounce, with a discount of over 20% compared to spot prices, indicating significant valuation attractiveness. Historical data shows that precious metal stock prices are closely related to the performance of the underlying commodities, with gold stocks having a fit (R²) of over 82% with gold prices in the past five years.

Analysts point out that if spot prices maintain current levels, stock prices are likely to see upward potential driven by revaluation. This provides an opportunity for investors to enter the market at the current discount levels.

Clear Divergence in Investor Sentiment, Increasing Potential for Reversal in Platinum Group Metals Sector

Citigroup's crowding score shows that investor attitudes towards different precious metal sub-sectors are diverging. Gold stocks like AngloGold and Fresnillo are classified as "consensus long," while platinum group metal stocks Sibanye and Impala are marginally classified as "consensus short."

This sentiment divergence provides additional upside potential for the platinum group metals sector, especially against the backdrop of improving fundamentals. Citigroup believes that as platinum group metal prices rebound and investors reassess the value of the sector, related stocks are likely to gain more attention.