Palladium Supported by Dollar Moves and Supply Tightness

Palladium futures held near $1,300 per ounce, their lowest level in over a month, following the Federal Reserve’s monetary policy meeting. As widely expected, the Fed hiked its benchmark rate for the first time since 2023 and is expected to deliver another hike this year amid elevated economic and geopolitical uncertainty, raising the opportunity cost of holding non-yielding assets such as palladium. Meanwhile, UBS forecasts a market surplus for palladium, as increased recycling and weaker consumption of catalytic converters are expected to more than offset lower mining output compared with last year. Persistent supply vulnerabilities in South Africa, linked to elevated operating costs and power grid instability, continued to raise concerns over mined output, while ongoing trade and geopolitical risks affecting Russian palladium also provided a supportive backdrop for prices.

Palladium futures rose to around $1,320 per ounce, rebounding from three week lows as a softer US dollar and short covering supported prices ahead of the Federal Reserve's policy decision. Palladium gained alongside broader gains across precious metals, with markets pricing a 92.4% chance of at least a 25 basis point rate hike. Fluctuations in Treasury yields also encouraged buying of dollar denominated commodities, while stretched short positioning after recent losses prompted further covering. Meanwhile, persistent supply vulnerabilities in South Africa, linked to elevated operating costs and power grid instability, continued to raise concerns over mine output. Ongoing trade and geopolitical risks affecting Russian palladium also provided a supportive backdrop for prices.

Palladium decreased to 1285.00 USD/t.oz, the lowest since August 2026. Over the past 4 weeks, Palladium lost 6.33%, and in the last 12 months, it increased 6.94%.