Palladium Eases from Three-Week High

Palladium futures traded near $1,500 per ounce, retreating from recent three-week peaks, as escalating US-Iran tensions drove prices higher and reinforced expectations of tighter monetary policy this year. US President Donald Trump dismissed Iran’s response to his peace proposal as “totally unacceptable,” with reports suggesting Tehran had offered to transfer part of its highly enriched uranium stockpile to a third country but refused to dismantle its nuclear facilities. The Strait of Hormuz remains effectively closed as diplomatic efforts between Washington and Tehran stall, keeping energy prices elevated and amplifying inflation concerns. The prospect of further central bank rate hikes to curb price pressures continued to weigh on precious metals. Meanwhile, supply remains constrained by production disruptions in South Africa and geopolitical risks tied to Russian exports, which are hindered by sanctions and evolving trade dynamics.

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.