Palladium Surges on Middle East Deal Hopes

Palladium futures climbed above $1,550 per ounce in May, following gains in other precious metals to reach their highest level since April 20, as signs of de-escalation in the Middle East weighed on oil prices, easing inflation concerns. According to Axios, the White House is close to a deal with Iran to end the conflict and begin nuclear negotiations, the nearest to an agreement since the war started. Precious metals had faced significant selling pressure since the war began, as soaring energy costs fueled inflation fears and reinforced expectations that central banks might maintain high interest rates or tighten policy further. On the supply side, the market remains tight, with output disruptions in South Africa and ongoing geopolitical sensitivity around Russian exports, which continue to face sanctions-related constraints and shifting trade flows.

Palladium futures rose toward $1,500 per ounce, rebounding from earlier losses as traders recalibrated their positions around shifting geopolitical signals. The rebound was reinforced by firmer sentiment across the broader metals complex and cautious optimism surrounding developments in the Middle East. President Trump said the US will begin escorting commercial ships through the Strait of Hormuz as part of a “humanitarian” effort, while also pointing to “very positive” discussions with Iran that have slightly reduced immediate escalation fears, though overall uncertainty remains high. Attention is also focused on upcoming macroeconomic signals, including US Treasury borrowing plans, Federal Reserve commentary, and key employment data. On the supply side, the market remains tight, with output disruptions in South Africa and ongoing geopolitical sensitivity around Russian exports, which continue to face sanctions-related constraints and shifting trade flows.

Palladium increased 5% to 1542.5 USD/t.oz