Palladium climbs above $1500 once more

Economies.com

2025-12-08 15:20PM UTC

Palladium prices advanced on Monday despite a slight uptick in the US dollar against most major currencies, as markets closely awaited the Federal Reserve’s policy decision.

A series of major central-bank meetings is scheduled this week, with the Fed at the forefront. Expectations point toward an interest-rate cut.

UBS last month raised its palladium price forecasts by $50 per ounce across all time horizons, citing expectations that the market will remain in a mild supply deficit through next year.

The bank noted that sentiment in the options market remains moderately positive, though now closer to neutral than at the start of the year.

The implied-volatility skew between call and put options for one- to six-month maturities currently stands between 1.8% and 2.4%, down from peaks of 3.4% to 9.1% earlier in the year.

UBS said the earlier surge in optimism — from early November 2024 to late January 2025 — was driven by fears of potential new sanctions targeting Russian palladium exports.

Russia accounts for roughly 40% of global mine supply, but continued flows of Russian metal into the market have eased concerns over supply disruption.

Short-term price volatility will largely hinge on the outcome of the US Commerce Department’s Section 232 investigation into critical minerals, as well as an anti-dumping petition filed by Sibanye and the United Steelworkers union.

Market participants are awaiting a decision from the US administration on whether to impose tariffs on palladium imports.

Despite raising its price target, UBS said it sees stronger upside potential in other precious metals, even though palladium is likely to remain in a mild deficit through 2026.

The US Dollar Index edged up 0.1% to 99.1 by 15:09 GMT, after trading between 98.7 and 99.1.

Palladium futures for March delivery rose 1.8% to $1,530.1 per ounce at 15:09 GMT.

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