FX.co ★ Palladium Pulls Back from Two-Week High

Palladium prices have eased to approximately $1,450 per ounce, declining from a recent peak of $1,518 reached on December 1. This decrease is largely attributed to profit-taking and the escalation of US Treasury yields. Earlier, the metal experienced a temporary uplift following the introduction of palladium futures in China towards the end of November. However, lackluster manufacturing demand in both China and the United States has exerted pressure on the market. China's official manufacturing PMI remained in contraction territory for the eighth consecutive month, while the RatingDog PMI unexpectedly fell to a four-month low. In the United States, the ISM Manufacturing PMI also dropped to a four-month nadir, remaining below the 50-point mark that signifies expansion. Notwithstanding the recent dip, palladium continues to hover near its highest levels since early 2023, bolstered by expectations of a modest supply deficit lasting until 2026 and sustained demand due to its safe-haven appeal. On a broader economic scale, signals of a slowing labor market, diminishing inflationary pressures, and dovish rhetoric from several Federal Reserve officials have prompted market participants to anticipate a 25-basis-point interest rate reduction in December.