FX.co ★ Palladium Steadies After 8-Month Low

Palladium traded near $1,350 per ounce, stabilizing after hitting an eight-month low as easing tensions in the Middle East improved risk appetite across commodity markets. Brent crude futures slipped below $80 a barrel, extending losses after nearly a 5% decline in the previous session following the announcement of an interim US–Iran peace agreement.

The drop in oil prices prompted investors to scale back expectations for additional Federal Reserve tightening, with the implied probability of a December rate hike falling to about 60%, down from roughly 70% a week earlier. Softer rate expectations pushed Treasury yields lower and lent support to precious metals. Further backing for palladium came from short covering, even as investors continued to track supply risks and assess the outlook for automotive demand.

Market participants are also focused on a series of central bank meetings this week, including the Fed’s rate decision on Wednesday, the first under new Chair Kevin Warsh. Over the past month, palladium has declined 3.84%, but remains 30.39% higher than it was a year ago.