Palladium Hovers Near 2-Week High

Palladium futures held around $1,000 an ounce, remaining near a two-week high as traders weighed Middle East developments against a subdued long-term demand outlook. Stalled diplomatic efforts between the US and Iran kept oil prices high as markets assessed the prospects for a truce. As energy prices remain elevated compared to pre-war levels, persistent inflation continues to fuel expectations of further monetary tightening across nations, dampening investment demand for the non-yielding metal. Over the longer term, elevated financing costs, alongside weaker vehicle production and the gradual shift towards EVs, weigh on automotive demand, a major source of palladium consumption. Still, a modest recovery is expected in 2027 amid stable hybrid demand. Constrained output from Russia, the world's largest palladium producer, offers some support, with Nornickel warning that an overhaul at one of its plants could extend into 2028.

Palladium decreased 5.07% to 993 USD/t.oz

Palladium futures traded around $1,050 an ounce, near a three-week high, as traders assess a subdued demand outlook against developments in the Middle East. A Democratic sweep in the US midterms raised hopes of a quicker end to the conflict, pushing oil prices lower and easing inflationary concerns, although diplomatic efforts have made little progress. However, stronger-than-expected US inflation and labour market data raised bets of a Fed rate hike next month, pushing borrowing costs higher and limiting demand for the non-yielding metal. Over the longer term, elevated financing costs, alongside weaker vehicle production and the gradual shift towards EVs, weigh on automotive demand, a major source of palladium consumption. Still, a modest recovery is expected in 2027 amid stable hybrid demand. Constrained output from Russia, the world's largest palladium producer, offers some support, with Nornickel warning that an overhaul at one of its plants could extend into 2028.