Palladium Futures Climb on Fed Rate-Cut Expectations

Palladium futures slipped below $1,400 per ounce, extending losses amid a broad metals sell-off sparked by escalating Middle East tensions. President Donald Trump’s prime-time address, offering no clear end to the conflict but vowing intensified military action, including potential strikes on electrical plants in the coming weeks, deepened market anxiety. A stronger US dollar and rising bond yields curbed demand for non-yielding assets, while stubborn inflation reinforced expectations of tighter monetary policy. The metal also faced downward pressure from profit-taking after its late-2025 to early-2026 surge, which had lifted prices to their highest since 2022. Weakening automotive demand and expanding supply, driven by increased recycling and steady production, added to the downturn. The accelerating shift to battery-electric vehicles (EVs), which eliminate the need for palladium, is further eroding demand, tipping the market into surplus.

Palladium futures surged above $1,400 per ounce, rebounding sharply from a five-month low as renewed US-Iran tensions stoked fears of disruptions to global metal supply. Missile strikes across the Middle East and the deployment of a US amphibious assault group have intensified geopolitical risk, while a broader rebound in precious metals, including platinum and silver, has strengthened investor demand amid shifting interest rate expectations. Adding further support, Russia’s Nornickel, the world’s largest palladium producer, highlighted rising industrial demand beyond the automotive sector. The company is investing USD 100 million to cultivate new palladium markets and aims to generate approximately 1.7 million troy ounces of annual demand by 2030, including near-term applications in electrochemistry for anodes and water treatment.

Palladium decreased 5.02% to 1361 USD/t.oz