Palladium Hits 5-week Low

Palladium futures rose to around $1,320 per ounce, rebounding from three week lows as a softer US dollar and short covering supported prices ahead of the Federal Reserve's policy decision. Palladium gained alongside broader gains across precious metals, with markets pricing a 92.4% chance of at least a 25 basis point rate hike. Fluctuations in Treasury yields also encouraged buying of dollar denominated commodities, while stretched short positioning after recent losses prompted further covering. Meanwhile, persistent supply vulnerabilities in South Africa, linked to elevated operating costs and power grid instability, continued to raise concerns over mine output. Ongoing trade and geopolitical risks affecting Russian palladium also provided a supportive backdrop for prices.

Palladium decreased to 1285.00 USD/t.oz, the lowest since August 2026. Over the past 4 weeks, Palladium lost 6.33%, and in the last 12 months, it increased 6.94%.

Palladium futures traded below $1,300 an ounce, near their lowest level since mid-August, as the metal remained influenced by near-term investment flows. Heightened economic uncertainty stemming from the conflict in the Middle East has raised expectations of monetary tightening across major economies, weighing on demand for the non-yielding metal. The ECB hiked its policy rate at its September meeting, while investors increased bets on a Fed rate hike at its meeting next week as US inflation held steady above target, further dampening demand for palladium. Meanwhile, UBS forecasts a market surplus for palladium, as increased recycling and weaker consumption of catalytic converters are expected to more than offset lower mining output compared with last year. On the other hand, Russian palladium exports to China doubled in the first seven months of the year.