Gold may get all the headlines, but platinum and palladium are having the kind of year that makes commodity traders do a double-take.

The abrdn Physical Platinum Shares ETF (PPLT) jumped nearly 9% on Tuesday, while the abrdn Physical Palladium Shares ETF (PALL) climbed 5.4%. Both funds hit 52-week highs as the underlying metals extended what's been a historic run in 2025, though they pulled back Wednesday.

Even after Wednesday's selloff—palladium dropped almost 8% and platinum fell nearly 3%—the year-to-date performance remains striking. Palladium is up more than 85% in 2025, while platinum has surged over 140%. That puts both ETFs among the best-performing commodity funds this year. PPLT alone has rallied nearly 150% from its 52-week low of $82.35, making it an increasingly attractive option for investors seeking exposure to platinum group metals (PGMs).

How These ETFs Work

PPLT provides direct exposure to physical platinum bullion, tracking the LBMA Platinum Price PM—the London Bullion Market Association's official afternoon benchmark. The fund carries a 0.60% annual expense ratio, and investor interest has surged as platinum prices approach record territory.

PALL follows a similar structure with the same expense ratio, offering physical exposure to palladium, which recently reached its highest level since early 2023.

What's Fueling the Rally

The gains reflect something more fundamental than trader hype: the physical metals market is genuinely tight right now. Supply disruptions, constrained mine output, and elevated lease rates have kept availability low, while automotive sector demand remains robust.

Here's why that matters. Platinum and palladium are critical components in catalytic converters, which reduce emissions in gasoline-powered vehicles. With policy signals from the Trump administration suggesting a pullback from aggressive electric vehicle mandates, expectations for continued internal combustion engine production have strengthened demand for PGMs. That's creating a favorable backdrop for these ETFs.

What's particularly interesting is that precious metals broadly have performed well even as real U.S. interest rates hover near multi-decade highs—a scenario that typically weighs on commodities. Japanese conglomerate Mitsubishi's precious metals team noted that this rally appears driven by long-term positioning rather than speculative froth, with inventories building at major exchanges in both the U.S. and China, according to BullionVault.

For ETF investors, the combination of constrained supply, industrial demand, and geopolitical uncertainty has created sustained upward momentum. Right now, PPLT and PALL are showing few signs of slowing down, even as volatility remains part of the picture.