Palladium Falls From 2-Month High

Palladium futures slipped below $1,330 per ounce after hovering near a two-month high, weighed by concerns over the long-term impact of growing electric vehicle demand. Although rising hybrid vehicle demand has provided near-term support for autocatalyst consumption, markets remain cautious amid the broader shift in demand toward EVs, which recorded a fifth consecutive monthly increase in July, as the palladium market could still record a global surplus. Meanwhile, uncertainty over shipments through the Strait of Hormuz kept buyers cautious on the industrial front. On the other hand, concerns over power supply disruptions and maintenance bottlenecks at South African mines, alongside uncertainty surrounding Russian exports, continued to underpin prices.

Palladium futures climbed toward $1,370 per ounce, remaining near more than two-month highs as reduced expectations for a Federal Reserve rate hike and broader strength across precious metals supported demand. Markets price in about a 50% chance of a September Fed hike, down from 60% before last week’s weaker-than-expected US jobs report, with lower rates generally supporting non-yielding precious metals. Meanwhile, heightened geopolitical tensions supported precious metals, as attacks on shipping by the US and Yemen’s Iran-aligned Houthis and uncertainty over the Iran conflict kept safe-haven demand elevated. On the supply front, concerns over disruptions in South Africa and uncertainty over Russian exports continue to support prices, with extended maintenance at South African processing facilities reducing refined PGM output amid tight inventories. Over the past month, palladium has risen 9.58% and is up 21.67% year-on-year.

Palladium futures held near $1,370 per ounce, remaining near a seven-week high as weaker-than-expected US jobs data reduced expectations of further Fed tightening, while Middle East tensions capped gains. US nonfarm payrolls unexpectedly declined in July, prompting markets to lower expectations of a near-term Fed rate hike to 43.9% from 57% before the report. However, President Donald Trump stated he believed the war would end soon, while attacks by Iran and Iran-backed Houthi militants continued to fuel concerns over energy supply disruptions and inflation. Meanwhile, US consumers continued to favor hybrid vehicles over battery-electric models in the first half of 2026, supporting demand for palladium used in catalytic converters. However, broader demand remained under pressure as Chinese EV sales rose for a third straight month in July. Nornickel, the world's largest palladium producer, expects a global palladium market surplus in 2026 as rising EV adoption weakens long-term demand.