Palladium futures advanced toward $1,370 per ounce, holding near their highest levels in more than two months as diminished expectations for a Federal Reserve rate hike and broad-based strength in precious metals underpinned demand. Markets now assign roughly a 50% probability to a Fed hike in September, down from 60% before last week’s weaker-than-expected US jobs report, and the prospect of lower rates is generally supportive for non-yielding precious metals.
At the same time, heightened geopolitical tensions have bolstered safe-haven demand, with precious metals benefiting from continued attacks on shipping by the US and Yemen’s Iran-aligned Houthi group, as well as ongoing uncertainty surrounding the Iran conflict.
On the supply side, persistent concerns over potential disruptions in South Africa and uncertainty around Russian exports are providing further price support. Extended maintenance at South African processing facilities has curtailed refined PGM output at a time of already tight inventories.
Over the past month, palladium prices have gained 9.58% and are up 21.67% compared with the same period a year earlier.
