Palladium futures climbed to around $1,360 per ounce, rebounding from recent declines as supply risks, robust automotive demand, and a weaker US dollar underpinned prices. Supply concerns remained elevated in South Africa and Russia—two countries that together account for the bulk of global mined output. In South Africa, operational challenges, rising costs, and ongoing power-grid instability fueled worries about refined production, while logistical bottlenecks affecting Russian metal continued to constrain spot market liquidity.
On the demand side, palladium benefited from resilient hybrid-vehicle production, which relies on higher palladium loadings in autocatalysts. Steady consumption from the chemical and electronics sectors also kept physical market balances tighter than previously anticipated. Meanwhile, the US dollar index slipped to 98.75, hovering near a two-week low, and softer Treasury yields lowered the opportunity cost of holding non-yielding metals. Interest-rate markets were pricing in about a 60% probability of a Federal Reserve rate hike next week, up from roughly 50% before the release of stronger US employment data.
