Palladium Prices Slide from Highs

Palladium futures fell to around $1,350 per ounce, extending losses for a second session after hitting three-month highs, as a stronger dollar and higher US Treasury yields weighed on the metal following hawkish signals from Federal Reserve Chair Kevin Warsh. Palladium also faced pressure from increased expectations of a September rate hike, with markets awaiting key US labour market data, including the ADP employment report and nonfarm payrolls, for further clues on the Fed’s policy path. Meanwhile, higher oil prices amid escalating tensions in the Strait of Hormuz lifted inflation expectations, adding to pressure on palladium. The metal fell more than 4.3% on Monday after Warsh signalled that policymakers may need to do more if inflation fails to move back toward the Fed’s 2% target. On the supply front, constrained mine output in major producing regions continued to provide some support, though supply concerns were outweighed by broader macroeconomic pressures.

Palladium decreased 5.04% to 1374 USD/t.oz

Palladium futures hovered near $1,380 per ounce, after reaching a three-month high, as near-term investment flows continue to influence prices despite stronger industrial demand. Hawkish statements from Fed Chair Warsh and fresh strikes in the Middle East supported expectations of a Fed rate hike, weighing on the non-yielding metal. Still, tighter emissions regulations could support the metal as consumers increasingly transition toward hybrid vehicles, which still use autocatalysts, rather than moving directly from to BEVs. Volatile fuel costs and tight supplies linked to the Middle East conflict are encouraging countries to reduce exposure to fossil-fuel price volatility. Additionally, Hyundai's plans to introduce 10 new hybrid models in North America further supports demand for the metal. However, major producing countries, particularly Russia and South Africa, continue to face geopolitical tensions and operational vulnerabilities in mining infrastructure, constraining supply.