Palladium Holds Near $1,550

Palladium futures hovered around $1,550 per ounce, staying below recent three-week highs, as a stronger US dollar and rising bond yields dampened the appeal of non-yielding assets. However, losses were contained by persistent supply tightness. Inflation fears intensified after the collapse of US-Iran peace talks, which sent oil prices soaring and further reduced expectations for Federal Reserve rate cuts in 2026. Traders now see little chance of a US rate cut this year, a sharp reversal from pre-war forecasts of two cuts. On the supply front, the market remains constrained, with production disruptions in South Africa and uncertainty over Russian exports limiting available volumes and supporting prices.

Palladium futures climbed above $1,500 per ounce, recovering from a sharp sell-off to reach a month-high amid a broader upswing in precious metals. The move was supported by improving macro sentiment after Donald Trump and Iran agreed to a two-week ceasefire, easing immediate geopolitical risks. The announcement prompted a sharp drop in oil prices, with crude falling below $100 per barrel, easing inflation concerns and strengthening expectations that the Federal Reserve may adopt a more accommodative policy stance. In turn, falling yields and a softer US dollar enhanced the attractiveness of dollar-denominated commodities. On the supply side, the market remains tight, with output disruptions in South Africa and ongoing uncertainty over Russian exports constraining available volumes.

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.