Palladium futures fell to around $1,650 per ounce, hovering near their lowest levels since mid-December, as surging energy prices strengthened the US dollar and reinforced expectations that interest rates may remain elevated for longer. Oil prices rallied sharply, with Brent crude briefly nearing $120 per barrel amid production cuts and supply disruptions across the Persian Gulf. The renewed upswing in oil has heightened investor concerns about a potential resurgence of inflation in the US, increasing the likelihood that the Federal Reserve could delay rate cuts or even contemplate further tightening.
Higher interest rates and a stronger dollar typically weigh on both precious and industrial metals, as these assets offer no yield and become more expensive for holders of other currencies. Meanwhile, supply conditions for palladium remain tight, with production disruptions in South Africa and persistent uncertainty surrounding Russian exports continuing to constrain available volumes.
