Palladium Rises as Conflict Nears Third Week

Palladium futures rose past $1,570 per ounce, rebounding after recent losses as escalating geopolitical tensions stoked concerns over supply and broader market stability. The gains came amid ongoing conflict between the United States and Iran, with no signs of hostilities easing. Oil prices surged sharply after Donald Trump suggested the stand-off could continue for several more weeks, disrupting flows through the strategic Strait of Hormuz and raising fears of prolonged energy shortages. Investor caution rose as higher oil costs could further constrain vehicle production, limiting the use of palladium in catalytic converters and supporting prices. On the supply side, intermittent disruptions in South African palladium output continue to tighten medium-term supply. Over the past month, palladium has slipped 6.8%, but it remains 63.5% higher than a year ago.

Palladium futures dropped to around $1,650 per ounce, close to their lowest levels since mid-December, as rising energy prices strengthened the US dollar and increased expectations that interest rates may stay high for longer. Oil prices surged, with Brent Crude briefly approaching $120 per barrel as production cuts and supply disruptions emerged across the Persian Gulf. As oil climbs, investors worry about renewed inflation in the US, raising the likelihood that the Federal Reserve could delay rate cuts or even consider additional tightening. Higher interest rates and a stronger dollar tend to pressure precious and industrial metals because they offer no yield and become more expensive for buyers using other currencies. On the supply side, the market remains tight, with output disruptions in South Africa and ongoing uncertainty over Russian exports constraining available volumes.

Palladium decreased 5.14% to 1577 USD/t.oz