Palladium Trades Lower

Palladium fell below $1,260 per ounce as investors weighed geopolitical risks against a weakening demand outlook. The US and Iran continued exchanging strikes, while uncertainty over the Strait of Hormuz kept oil prices elevated, amid conflicting claims over whether the waterway remained open. Rising inflation concerns reinforced expectations that the Federal Reserve will raise interest rates by year-end, weighing on sentiment of non-yielding assets. Meanwhile, demand for palladium remained under pressure as the shift toward electric vehicles continued to reduce consumption from gasoline-powered vehicles, while ongoing substitution by automakers in favor of platinum further limited the metal's upside. On the supply side, South Africa's Sibanye-Stillwater announced plans to advance seven primary platinum group metals mining projects, with the first phase already approved.

Palladium traded above $1,240 per ounce, hovering close to its lowest level since early October, as investors remained cautious over escalating Middle East tensions and their implications for inflation and monetary policy. The US and Iran exchanged airstrikes following attacks on vessels near the Strait of Hormuz, while Washington revoked a 60-day waiver allowing Iran to sell crude, driving oil prices higher and reviving concerns over supply disruptions and inflation. Expectations of higher for longer interest rates also weighed on non-yielding assets such as palladium, with markets pricing in another Fed rate hike by the end of 2026. Although demand from internal combustion vehicles continues to decline, increased substitution for palladium in autocatalysts has provided some support. Meanwhile, South Africa's Sibanye-Stillwater announced plans to advance seven primary platinum group metals mining projects, with the first phase already approved.

Palladium decreased 5.35% to 1213 USD/t.oz