FX.co ★ Palladium Pulls Back After Mid-October High

Palladium prices have stabilized around $1,460 per ounce, stepping back from their mid-October high of $1,655. This retreat is largely due to tempered expectations for further Federal Reserve interest rate cuts and a decrease in safe-haven demand following the US-China trade agreement. Although the Federal Reserve recently enacted a much-anticipated 25 basis point rate cut, Jerome Powell, the Fed Chair, noted that a further reduction in December is not a certainty, especially with economic data collection hampered by the ongoing US government shutdown. Despite this recent decline, palladium has still achieved an approximate 35% increase for the year, driven by strong investor interest in precious metals and ongoing short-term supply shortages. Additional market support comes from US supply-security and trade initiatives, such as the Section 232 critical minerals investigation and Sibanye’s antidumping petition. Meanwhile, Nymex inventories have reached a ten-year peak, a result of precautionary stockpiling.