Palladium Drops Further to a 16-Month Low
Palladium futures extended its decline to below $1,100 an ounce and reaching its lowest level since June 2025, weighed by persistent investment outflows and a bearish long-term demand outlook. A prolonged Middle East conflict has driven global energy prices higher as risk premiums rise, fuelling inflation and strengthening expectations of hawkish central bank decisions across economies. Over the longer term, higher rates could exert greater downward pressure in investment demand for the metal that carries no yield. Higher borrowing costs and fuel prices also weigh on automotive demand, while the shift towards platinum in catalytic converters adds to long-term demand concerns, although resilient hybrid demand has helped cushion the decline. Meanwhile, the lack of major disruptions in key producing countries and steady recycling flows eased concerns about shortages. Market sentiment is also undermined by a projected surplus in the platinum group metals complex.
Palladium futures extended its decline to below $1,100 an ounce and reaching its lowest level since June 2025, weighed by persistent investment outflows and a bearish long-term demand outlook. A prolonged Middle East conflict has driven global energy prices higher as risk premiums rise, fuelling inflation and strengthening expectations of hawkish central bank decisions across economies. Over the longer term, higher rates could exert greater downward pressure in investment demand for the metal that carries no yield.
Higher borrowing costs and fuel prices also weigh on automotive demand, while the shift towards platinum in catalytic converters adds to long-term demand concerns, although resilient hybrid demand has helped cushion the decline. Meanwhile, the lack of major disruptions in key producing countries and steady recycling flows eased concerns about shortages. Market sentiment is also undermined by a projected surplus in the platinum group metals complex.